What a Difference a Day Makes

Bonds completely erased yesterday’s snowball sell-off with an even bigger snowball rally in the mid-morning hours.  Motivations were twofold.  Drama began at 9:30 as bank stocks began to tank, ultimately resulting in several of them being halted.  Treasuries were already following that flight-to-safety trade when the JOLTS data came in on the soft side, further underscoring a potential cooling in the labor market.  By those powers combined, bond buyers scurried to get into position for what suddenly looked like it might be a friendlier Fed tomorrow afternoon.

Econ Data / Events

JOLTS

9.59m in March vs 9.974m in Feb

Market Movement Recap

09:18 AM Weaker in Asia. Stronger in Europe. Modest gains remain despite some early selling.  10yr down 1.5bps at 3.555.  MBS up 1 tick (0.03).

10:22 AM Tame JOLTS data and slumping bank stocks are leading a big rally.  10yr down 11bps at 3.46.  MBS up only 5 ticks (.16) on the screen, but liquidity would make that more like 9 ticks (.28)

01:56 PM Rally leveled off heading into noon hour.  no major retracement in MBS, currently up 18 ticks (.56).  10yr up 12.5bps at 3.445.

03:45 PM Best levels of the day with MBS up 19 ticks (.59) and 10yr yields down 14.2 bps at 3.428