Today looked like it would be all about waiting for the Fed Minutes to see if there were any surprises. That plan began in fairly good shape, with only a mild rally following weaker residential construction data. By mid-day, bonds were staging near their stronger levels from yesterday's domestic session. Then the weird stuff started happening.
Big trades (purchases) slammed into the bond complex--far too big to be accounted for by anything random. At the same time, movement in stocks and $/Yen told us that something was going on, but it took a few minutes before any likely suspects were found at the scene.
The first (and ultimately, the "only") suspect popped up several minutes after the initial move. It came in the form of a tweet from Trump, saying that he was disbanding his council of CEOs. Twitter began crediting the tweet for the market move and I immediately took exception, saying it couldn't possibly be the source of the movement because--well... look at the damn timestamp! It was so obvious, after all.
It's bound to happen a few times a year. I'll definitively reject a hypothesis for seemingly cut-and-dried reasons only to find out that I was hasty in hindsight. I'll be the first to tell you today was one of those days (and the first to point out my chat in MBS Live about the news possibly leaking out before the tweet). That was indeed the case. Upon further investigation, several traders said it had popped up as early as 12:50pm, but that they didn't think much of it until the bigger moves closer to the time of the tweet.
In fact, it wasn't until the tweet came out that market participants began putting 2 and 2 together. But clearly, some very deep-pocketed traders knew exactly what was going to happen more than 20 minutes before it actually happened (there were smaller volume spikes at 12:50pm, and then the biggest trades that preceded the tweet itself by a few minutes).
After the tweet, we had some actual momentum in bonds, although it was merely moving yields from one end of their micro-range to the other. It paused in order to see if the Fed had anything interesting to say in the Minutes. They didn't, and so the rally resumed after the Fed Minutes, ultimately hitting 2.2202% in 10yr yields. MBS had a smaller version of the same move, with Fannie 3.5 coupons rising 6/32nds of a point to 103-07.