Article Summary
Bonds started weaker, then flipped stronger mid-day, and moved back to unchanged levels by the close on Friday. Most of the day’s volatility surrounded comments from a Swiss finance minister about the US/China trade talks. The coming week may see some volatility due to potential hints from headlines about the discussions. A day later, CPI will provide the first big-picture assessment of April’s inflation.
What This Means for You
- Keep an eye on US/China trade talks over the weekend, as headlines may cause volatility in the bond market at the beginning of the following week.
- Stay informed about April’s CPI assessment to understand the inflation rates within the US economy.
- Consider taking advantage of mobile apps that offer alerts for MBS Commentary and real-time MBS and Treasury prices to stay up-to-date with market news and fluctuations.
- Stay cautious with bond investments in the current low-odds environment for any sort of trade resolution.
Original Post
Flat Friday, But Volatility Risks Remain
Fri, May 9 2025, 5:07 PM
Bonds started weaker, flipped stronger mid-day, and then slowly moved back to unchanged levels by the close. Most of the day’s volatility surrounded comments from a Swiss finance minister on this weekend’s US/China trade talks (in Switzerland). The movement was very small in the bigger picture, possibly reflecting the very low odds for any sort of trade resolution like yesterday’s UK/US deal. Still, over the weekend headlines may provide hints as to where the discussions are headed, and that could be worth some volatility as the coming week begins. A day later, CPI will provide the first big-picture assessment of April’s inflation (still exceptionally early when it comes to potential tariff-related impacts, but not too early to see some impact).
09:59 AM
Modestly weaker overnight, but moving back into positive territory now. MBS up 1 tick (.03) and 10yr up 1.8bps at 4.359
01:14 PM
Mostly flat all morning. MBS up 1 tick (.03) and 10yr down 1.2bps at 4.365
04:49 PM
Heading out near weakest levels with MBS down 1 tick (.03) and 10yr yields up 0.7bps at 4.384
Key Terms
- Bonds
- Volatility
- US-China Trade Talks
- Consumer Price Index (CPI)
- Mortgage-Backed Securities (MBS)
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