Article Summary
Another “Just Because” Sell Off is happening in the bond market, with yields changing briskly without any clear catalysts. This has led to guesses and generalizations as market watchers try to explain the price action. A broad rotation out of bonds and into stocks is underway, and there have been headlines about potential Korea/Japan trade deals and Treasury issuance implications associated with congressional budget headlines. However, the reality is likely more complicated and boring than this small collection of usual suspects.
What This Means for You
- Be aware of the fluctuating bond market and how it may impact your investments.
- Stay informed about potential trade deals and their implications on the market.
- Monitor the rotation of investments from bonds to stocks and adjust your portfolio accordingly.
- Keep an eye on congressional budget headlines and their impact on Treasury issuance.
- Expect more complicated and potentially boring market movements in the future.
Original Post
Another “Just Because” Sell Off
Wed, May 14 2025, 5:08 PM
This is getting old… and unfortunately, more prevalent. The bond market has been offering up more and more examples of reasonably brisk changes in yields without any obvious catalysts. This forces market watchers to concoct narratives to fit the price action (i.e. to say things that wouldn’t be said if the mystery move was a rally). In other words, guesses and generalizations are the name of the game. What we do know is that a broad rotation out of bonds and into stocks is underway, even if stocks weren’t a good example of that today. We know there were some headlines regarding potential Korea/Japan trade deals in the works. And we know the bond market isn’t thrilled with the potential Treasury issuance implications associated with congressional budget headlines. All that having been said, the reality is probably significantly more complicated and boring than this small collection of usual suspects.
10:06 AM
Modestly weaker overnight and a bit weaker so far. MBS down almost an eighth and 10yr up 2bps at 4.49
12:29 PM
More weakness. MBS down just over a quarter point and 10yr up 5bps at 4.519
02:26 PM
Flat at weakest levels. MBS down 9 ticks (.28) and 10yr up 5.3bps a
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t 4.522
03:11 PM
Weaker at the 3pm CME close. MBS down 11 ticks (.34) and 10yr up 6.5bps at 4.534
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