Bonds were back in action today although you'd hardly know it based on the narrow trading range. Stocks were much more willing to put on a show with S&P futures down 1.5% by the close. Bonds gleaned some small benefit from that, perhaps, as 10yr Treasuries went from slightly weaker to slightly stronger during the stock sell-off. In general though, bonds continue to wait on GA senate election results (earliest possible impact would be Thursday).
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Active trading overnight, weaker at first, but then stronger during European hours. Slightly higher yields at the domestic open. Biggest movers so far = corporate issuance, and overnight headlines regarding a "new South African variant" of covid (mostly impacted UK bond markets, but helped US bonds).
Treasuries turned positive, albeit reluctantly with the key consideration so far being a fairly substantial decline in stocks (S&P futures down almost 2%). 10yr yields aren't even 1bp lower, however (.91%) and UMBS have only added 2 ticks (0.06). Stocks are trying to bounce, and bond yields may be encountering some resistance.
Bond yields bottomed out in concert with stock prices just after noon. Both have inched higher since then. 10yr Treasuries are effectively unchanged and MBS are still up just a hair. Very ho-hum opener for 2021.
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