Another Day of Gains With Some Quarter-End Distortion

Q1 was fairly eventful for the bond market with solid–sometimes puzzling–gains in February followed by a relative rout in March. Heavy quarter-end rebalancing flows are making for more volatility than normal at 4pm ET, but up until that point, 10yr yields had rallied roughly 8bps. Those gains were fueled by headlines that spoke to potential de-escalation in Iran–something that’s easy enough to confirm by examining the corresponding drop in oil prices and spike in stocks. That said, the underlying news falls short of marking a distinct turning point in the war.

Econ Data / Events

Case Shiller Home Prices-20 y/y (Jan)

1.2% vs 1.3% f’cast, 1.4% prev

CaseShiller 20 mm nsa (Jan)

-0.1% vs — f’cast, -0.1% prev

FHFA Home Price Index m/m (Jan)

0.1% vs 0.1% f’cast, 0.1% prev

FHFA Home Prices y/y (Jan)

1.6% vs — f’cast, 1.8% prev

Job Openings

6.882m vs 6.92m f’cast, 7.24m prev

Job Quits (lower = better for bonds)

2.974m vs 3.100m prev

Market Movement Recap

09:18 AM Moderately stronger overnight. MBS up just over a quarter point and 10yr down 5bps at 4.302

12:50 PM Near best levels with MBS up more than 3/8ths and 10yr down 5.3bps at 4.298

01:53 PM MBS up 11 ticks (.34) and 10yr down 4.2bps at 4.31

04:12 PM Off the best levels after quarter-end rebalancing trades. MBS up only 10 ticks (.31) and 10yr down only 3 bps at 4.322