Friendly Fed Comments No Match For The Range

The day began with a bond rally courtesy of geopolitical headlines (martial law declared in South Korea). Traders were done reacting to the news by 9am and yields were heading back up after that with a 10am push from stronger JOLTS data. There were several friendly comments from Fed speakers in the early afternoon, but they only materially benefitted the short end of the yield curve (i.e. 2yr yields are lower on the day while 10yr yields are several bps higher). The other way to view the move is simply that the bond market rallied as much as it was willing to rally by the end of last week and yields haven’t been able to make any additional progress since then. Indeed, each of the past 3 trading sessions has seen a 10yr yield low of almost exactly 4.17%.  Tomorrow brings an important slate of econ data with ADP employment, ISM Services, and an afternoon Powell speech. 

Econ Data / Events

Job Openings

7.744m vs 7.480m f’cast, 7.372 prev

Job Quits

3.326m vs 3.071m prev

Market Movement Recap

09:36 AM Slightly weaker overnight, then stronger on geopolitical headlines.  MBS up 2 ticks (.06) and 10yr down 1.7bps at 4.177

10:55 AM At the lows of the day with MBS now unchanged and 10yr up 1.2bps at 4.206

02:48 PM Modest recover into 1pm hour, but back near same lows now.  MBS down 3 ticks (.09) and 10yr up 1.9bps at 4.213