Month End Buying Pushes Back on Mid-Day Weakness

Bonds began the day in stronger territory as investors  reacted to weekend tariff news with a risk-off move.  Stocks bounced shortly after the NYSE open and bond yields were pulled higher in concert.  That prevailing correlation broke down around 3pm due to month/quarter end bond buying (3pm is the official close for bonds, even though trading continues until 5pm). There was no major reaction to econ data or Fed speakers today.  The data becomes more relevant in the coming days. 

Econ Data / Events

Chicago PMI

47.6 vs 45.2 f’cast, 45.5 prev

Market Movement Recap

09:54 AM Stronger overnight as stocks continue tanking.  MBS up 3 ticks (.09) and 10yr down 2.7bps at 4.208

11:30 AM Weakest levels of the day. MBS nearly unchanged and 10yr still down 1.3bps at 4.223

03:10 PM Some month/quarter end buying at 3pm helping a modest recovery.  10yr down 0.3bps at 4.232.  MBS unchanged.