Risk Aversion Returns. Bonds Like It

First Republic's weaker earnings set the tone in the overnight session as debt ceiling drama continued to raise questions in the background.  Combined with several other examples of lackluster earnings and the general uncertainty caused by ongoing rate hikes despite signs of economic cracks, the bond market had enough risk-aversion sentiment to fuel a rally.  That narrative remained fairly steady throughout the day with stocks--and especially bank stocks--correlating with the drop in bond yields.  10s hit the floor of the current range as of the 3pm close.  MBS struggled to sustain a quarter point gain.