Sometimes Sideways is The Best Case Scenario

Sometimes Sideways is The Best Case Scenario

Granted, there was a possibility that today could have been a rally day for the bond market, but as seen in the overnight trading session, that possibility depended on the escalation of war in the Middle East.  There aren't many other reasons for bonds to push back too much on recent weakness.  One of the only other reasons would be Friday position squaring and short covering, but that would be just as much of an indication of ongoing bearishness in bonds. In that sense, holding sideways is possibly the best victory we could have hoped for today. The fact that we've avoided Tuesday's high yields through the end of the week could even signal sideways vibes until May, at which point data and the Fed will let us know the direction of the next big move.

Market Movement Recap
09:38 AM

Initially stronger overnight, but giving up gains since then. 10yr down 1.7bps at 4.609.  MBS up 1 tick (.03).

10:27 AM

10yr all the way back to unchanged at 4.627.  MBS down 2 ticks (.06)

02:02 PM

Broadly sideways and choppy, but currently unchanged in MBS and 10yr.

04:27 PM

Still sideways.  MBS up 1 tick (0.03) and 10yr down half a bp at 4.622

Latest Video Analysis

Sometimes Sideways is The Best Case Scenario

MBS & Treasury Markets
UMBS 6.0 99.32 +0.02 10YR 4.517% -0.109% 4/19/2024 5:04PM EST
The overnight session began with a very clear flight to safety in stocks (sell) and bonds (buy) on headlines regarding increased hostilities between Iran and Israel.  There have been plenty of "increased hostility" headlines this week that have not had much impact.  These were different because the initial newswires played up the risk to Iran's nuclear sites.  Shortly thereafter, the IAEA said there was no damage to nuclear sites and Iran said there were no pla...   READ MORE
Today's Mortgage Rates
30YR Fixed 7.44% +0.01% 15YR Fixed 6.85% +0.01% 4/19/2024
The Fed expected to be able to cut rates 3 times in 2024 as recently as March. Financial markets agreed. But the data that's come out since then has everyone singing a different tune.  This week's data was more of an afterthought compared to last week's. The chart above pertains to Fed rate expectations, and that's not exactly the same as longer term rates like mortgages and 10yr Treasury yields.  The latter saw a bit more volatility this week. Monday's Reta...   READ MORE
Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Apr 19
10:30AM Fed Goolsbee Speech
1:00PM Apr/19 Baker Hughes Oil Rig Count Apr/19 511 506
1:00PM Apr/19 Baker Hughes Total Rig Count Apr/19 619 617
Monday, Apr 22
8:30AM Mar National Activity Index Mar 0.05
11:30AM 26-Week Bill Auction (bl) 70
11:30AM 6-Month Bill Auction 5.155%
11:30AM 3-Month Bill Auction 5.250%
11:30AM 26-Week Bill Auction (bl) 70
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The Fed expected to be able to cut rates 3 times in 2024 as recently as March. Financial markets agreed. But the data that's come out since then has everyone singing a different tune.  This week's data was more of an afterthought compared to last week's. The chart above pertains to Fed rate expectations, and that's not exactly the same as longer term rates like mortgages and 10yr Trea... READ MORE