Another Nice Round Trip For Bonds--Especially MBS

Nothing new or interesting happened today in terms of underlying events, news, or data. But the price action itself was a different story. While the moves weren't extreme, it was nonetheless notable that bonds lost ground in a very intentional way this morning only to reverse course and make it back to positive territory by the close. Yields are still broadly sideways at long-term highs, but we now have a second straight day having closed near the week's best levels. MBS outperformed Treasuries a bit, and officially turned green by the afternoon even as 10yr yields were a hair higher. It's all somewhat promising, but not conclusive evidence of "more to come." The 3-day weekend may be adding some distortion. Either way next week's data may play a big role in making this week look like a false start or sneak preview.