Gains Completely Erased; Stocks Looking More Culpable

Viewed in a vacuum, this mornings 7-8am rally remains enigmatic. There was some small case to be made that stock losses played a role, but the bond buying definitely didn’t line up with stocks in a normal way (i.e. it looked like there was some third variable that caused the bond rally to play out in a much more concentrated way). But as the day progressed, we saw stronger evidence of correlation between stock prices and bond yields. Specifically, a sharp rebound in stocks at the 9:30am NYSE open coincided with an equally sharp reversal in bonds. Yields ultimately leveled off 2.5-3bps higher on the day with MBS spending the afternoon in just barely weaker territory.

Econ Data / Events

ADP Weekly Payrolls (Tue, 11/11)

-11k 

Market Movement Recap

08:39 AM Initially weaker overnight, but now stronger after a big rally at 7am-730am. MBS up 5 ticks (.16) and 10yr down 5bps at 4.067

09:58 AM giving up most of the AM gains.  10yr down less than half a bp at 4.112.  MBS still up 3 ticks (.09) but down 5 ticks (.16) from AM highs. 

12:24 PM New lows.  MBS down 1 tick (.03) and 10yr up 2.7bps at 4.142

04:22 PM Heading out near weakest levels. MBS down 2 ticks (.06) and 10yr up 3bps at 4.145