Markets Hit by Glut of Escalation Headlines

Markets Hit by Glut of Escalation Headlines Monday's trading session ended up being as simple as it was unpleasant. Bonds lost ground somewhat sharply as war-related headlines kept adding up to additional escalation. Highlights include overnight reports of Iran hitting a U.S. warship with missiles, multiple reports of UAE air defenses being activated, and damage/fire at a UAE oil export terminal. While bonds had a few moments of independence, they were broadly driven by rising oil prices associated with the aforementioned headlines. Econ Data / Events ISM Manufacturing Employment (Apr) 46.4 vs 49 f'cast, 48.7 prev ISM Manufacturing PMI (Apr) 52.7 vs 53 f'cast, 52.7 prev ISM Mfg Prices Paid (Apr) 84.6 vs 80 f'cast, 78.3 prev Market Movement Recap 09:20 AM moderately weaker overnight. 10yr up 3.5bps at 4.41 and MBS down 7 ticks (.22). 11:31 AM Weakest levels after headlines regarding Iran attacking UAE. MBS down 3/8ths and 10yr up 6bps at 4.435 02:23 PM sideways just off weakest levels. MBS down half a point and 10yr up 7.1bps at 4.447