What’s Up With Today’s Big Nasty Sell-Off?

After a stretch of 3 days where bonds could seemingly do no wrong, and 3 weeks spent generally rallying from the top to the bottom of the prevailing yield range, bonds were met with the sharpest sell-off since mid-June.  Granted, this one is a bit less traumatic since it began with the lowest yields in months, but sharp selling is sharp selling.  Scapegoats include Fed comments, rampant corporate debt issuance, and a fertile environment for an overbought technical bounce.  This perfect little storm is discussed in greater detail in today’s video.

Econ Data / Events

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Market Movement Recap

08:29 AM Stronger at the start of the overnight session as equities lost ground in Asia.  10yr fell 5-7bps and has chopped around near those levels ever since–currently down 5.7bps at 2.53.  MBS up more than an eighth.

09:42 AM Quick, moderately big selling between 9 and 930am ET.  10yr back up to unchanged.  MBS down an eighth, roughly (a bit more where illiquidity is involved).  

01:46 PM Tanking hard into the PM hours with 10s up almost 15bps at 2.732 and MBS down roughly 1 point.

04:02 PM Treasuries still pushing weakest levels with 10yr up 17+ bps at 2.761.  MBS are holding more sideways over the past few hours, but also heavily damaged.  4.0 coupons are down a full point at 99-26 (99.81).