Markets Hit by Glut of Escalation Headlines

Monday’s trading session ended up being as simple as it was unpleasant. Bonds lost ground somewhat sharply as war-related headlines kept adding up to additional escalation. Highlights include overnight reports of Iran hitting a U.S. warship with missiles, multiple reports of UAE air defenses being activated, and damage/fire at a UAE oil export terminal. While bonds had a few moments of independence, they were broadly driven by rising oil prices associated with the aforementioned headlines.

Econ Data / Events

ISM Manufacturing Employment (Apr)

46.4 vs 49 f’cast, 48.7 prev

ISM Manufacturing PMI (Apr)

52.7 vs 53 f’cast, 52.7 prev

ISM Mfg Prices Paid (Apr)

84.6 vs 80 f’cast, 78.3 prev

Market Movement Recap

09:20 AM moderately weaker overnight. 10yr up 3.5bps at 4.41 and MBS down 7 ticks (.22).

11:31 AM Weakest levels after headlines regarding Iran attacking UAE. MBS down 3/8ths and 10yr up 6bps at 4.435

02:23 PM sideways just off weakest levels. MBS down half a point and 10yr up 7.1bps at 4.447