• Data overlooked as bonds react to stocks/oil early 
  • Bonds then ignore stock/oil rally later in the day and hold ground at stronger levels
  • Could be month-end bond buying or bonds could be calling stocks' bluff.

Bond markets had quite the resilient little day.  Stocks and oil prices both surged well into positive territory in the early afternoon but MSB and Treasuries merely opted to level-off and hold sideways at stronger levels.  Granted, these levels are still weaker than yesterday's best levels, but they're just as far away from yesterday's weakest levels too!  So pick the fullness of your glass however you see fit. 

Data was uneventful in terms of market reaction.  The data itself was a potential threat with Durable Goods coming in much stronger than expected.  But bond markets weren't impressed, choosing instead to follow stocks and oil sideways into 9:30am and then lower from there.  That made it all the more impressive when bonds continued sideways as stocks went on to their best closing levels since January 6th.

It's hard not to view bond markets as a more cunning mastermind to the stock market's flights of fancy.  Bonds seem to be biding their time with a certain level of confidence that stocks and oil are destined to return lower. Either bonds are calling stocks' bluff, or we could be seeing some extra resilience due to month-end trading needs.  

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
102-18 : +0-02
Treasuries
10 YR
1.7140 : -0.0280
Pricing as of 2/25/16 5:31PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:09PM  :  Heads-Up: Bond Gains Interrupted by Surge in Oil/Stocks
10:24AM  :  Oiled-Up Stocks Center Stage and Bonds Can't Look Away
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ted Rood  :  "almost appears rates are trending down!"
Matthew Graham  :  "It's easy to get worked up over every little blip of weakness, but here's where we're at long term: https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=3A2f"
Brent Borcherding  :  "These are Normalized Rates. They've been trending in this direction for 30 years. When rates were at 6% was 8% normal? We'll eventually bottom out, we may be close to it, and then they'll stay around that level for 10-15 years...or forever."
Matthew Graham  :  "if anything, volatility is much milder than historical norms. The only real exception was the utterly repressed ranges associated with confluence of the EU crisis and Fed QE. I'm still trying to figure out what you're taking exception to when we're just a hop/skip/jump from all time low rates and when 10yr yields only rose 3bps but are still down more than 4 on the day. In other words, things seem good! No?"
Ray Leone  :  "MG, the volatility in today's equity and bond markets is over the top. We survivors in the mtge bus sure have benefited, but I am still wondering how we will ever get back to normalized rates, whatever that is. Back to work."
Victor Burek  :  "need oil prices higher, just say you are having a meeting"
Victor Burek  :  "Venezuela OPEC headlines: VENEZUELA SAYS RUSSIA, SAUDI ARABIA, QATAR AGREE ON MARCH MEETING"
Matthew Graham  :  "Oil over $30 = Stock celebration!"
Oliver Orlicki  :  "Finger on the lock trigger"
Oliver Orlicki  :  "stocks love these mid day reversals recently"
Matthew Graham  :  "it's an outrage"
Jeff Anderson  :  "Traders have to work on a Friday now?"
Matthew Graham  :  "rescheduled"
Matthew Graham  :  "RTRS - U.S. TO CONDUCT $28 BLN 7-YEAR NOTE AUCTION ON FEB. 26"