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Bonds Getting Hit From Tariff Updates, Real or Otherwise
Bonds Getting Hit From Tariff Updates, Real or Otherwise
It's been an interesting Monday so far for the bond market (and stock market for that matter). Despite a big risk-off move (stocks and yields lower) to start the overnight session, markets gradually unwound that trade starting in Europe. Motivation generally stemmed from a cavalcade of headlines suggesting that US trade partners were "willing to negotiate on tariffs." Then sentiment kicked into overdrive when a headline hit the wires regarding a potential 90 day tariff pause. It has since been debunked, but the some of the associated selling pressure remains. Don't think of this as markets ignoring reality. Rather, yields have simply moved back in line with the prevailing selling trend that began around 4am ET.
Weaker overnight with more selling early. MBS down 3 ticks (.03) and 10yr up 6bps at 4.065
Additional losses on "tariff pause" headlines. MBS down 3/8ths and 10yr up 14.4bps at 4.151
Back to weakest levels of the day after a modest bounce. MBS down nearly 5/8ths and 10yr up 16bps at 4.165.
Wild Round Trip Leaves MBS Weaker Despite Huge Initial Rally
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Monday, Apr 07 | |||||
| 10:30AM | Fed Kugler Speech | ||||
| 3:00PM | Feb Consumer credit (bl) | Feb | $-0.81B | $15.2B | $18.08B |
| Tuesday, Apr 08 | |||||
| 6:00AM | Mar NFIB Business Optimism Index | Mar | 101.3 | 100.7 | |
| 1:00PM | 3-Yr Note Auction (bl) | 58 | |||
| 2:00PM | Fed Daly Speech | ||||
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