Global Bond Market in Reprice Mode

Around here, “reprice” typically refers to mid-day rate changes from mortgage lenders, but infrequently, a big picture repricing occurs in the bond market. That’s what’s going on in March and especially over the last 2.5 days. Wednesday’s Fed comments and Thursday’s ECB/BOE comments confirmed that there’s a floor under short term rates for a vast majority of the planet’s reserve currency holdings, AND that hikes are quickly replacing cuts as the next likely move (September Fed meeting went from 0% hike chance to more than 25% in less than 2 days). Trading and investment strategies of a majority of the world’s investible capital was positioned for an entirely different reality before the Iran war. Now it is repositioning… repricing for new realities. 

Market Movement Recap

09:46 AM Sharply weaker overnight with additional selling all morning. MBS down over half a point and 10yr up 7.8bps at 4.327.

01:37 PM MBS down half a point and 10yr up 11.4bps at 4.364