That Escalated Quickly

That Escalated Quickly It would be easy to check in on the bond market at some point on Thursday afternoon and conclude there'd been precipitous escalation in the Iran war or some other big new development putting pressure on bonds (10yr yields up almost 10bps to 4.42+ and MBS down more than 5/8ths). But today's selling was remarkably linear and steady. It began in the overnight session and ramped up at 10:30am ET after a brief correction this morning. If you need a single scapegoat, it's simply "renewed escalation" after yesterday's session raised some hopes for the opposite. Looking a bit deeper, we also suspect the entire market is positioning defensively for a weekend with serious volatility potential.  Econ Data / Events Continued Claims (Mar)/14 1,819K vs 1850K f'cast, 1857K prev Jobless Claims (Mar)/21 210K vs 210K f'cast, 205K prev Market Movement Recap 08:31 AM Weaker overnight and no reaction to data. MBS down a quarter point and 10yr up 4.4bps at 4.375 11:24 AM Down 10 ticks (.31) on the day and 5 ticks (.16) from AM highs.  10yr up 4.5bps at 4.376 12:34 PM Weakest levels. MBS down more than 3/8ths and 10yr up 7bps at 4.399 02:32 PM More selling. MBS down 5/8ths and 10yr up 8.6bps at 4.417