Mid-Day Mystery Move But no Impact on Bigger Picture

The most notable development in the bond market today was the fairly abrupt (but still small-scale) sell off that took place between 11:20am and noon ET.  Oftentimes, there are at least a few reasonable options to serve as scapegoats for otherwise inexplicable market movement, but that’s arguably not the case this time around.  Is it political? If so, why did the market wait until 11:20am?  Is it related to other markets?  Stocks also sold off at the time, but they rallied back whereas bonds did not.  Europe?  The timing lines up, but the move in US bonds was bigger (the opposite of what a European influence would suggest).  Ultimately, the incredibly low volumes and range-contained losses mean we don’t have to agonize over this one.

Market Movement Recap

11:30 AM Slightly stronger overnight but giving up some gains in the past few minutes.  10yr up 0.4bps at 4.242.  MBS roughly unchanged.

01:25 PM weakest levels of the day just before 1pm.  MBS down 3 ticks (.09) and 10yr up 2.6bps at 4.264

04:20 PM MBS back to unchanged and 10yr up 1.8bps at 4.256