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.
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- JOLTS
- 9.59m in March vs 9.974m in Feb
- JOLTS
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).
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)
Rally leveled off heading into noon hour. no major retracement in MBS, currently up 18 ticks (.56). 10yr up 12.5bps at 3.445.
Best levels of the day with MBS up 19 ticks (.59) and 10yr yields down 14.2 bps at 3.428
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