More War-Related Weakness, But With a Supportive Bounce

More War-Related Weakness, But With a Supportive Bounce Bonds officially closed at the highest yields in more than a month. At one point just before the noon hour, the 10yr was just over 4.59, but ultimately moved back to 4.56. That's only about 1bp higher than yesterday's latest levels (which feels like a win compared to the mid-day trend). Oil prices and bond yields remain in a tight correlation, and once again, war-related headlines set the tone. The most notable among them was a Trump comment regarding the ceasefire being cancelled/over.  As was frequently the case in the run-up to the signing of the MOU, it's hard to know which comments represent "tough talk" as opposed to legitimate shifts in policy and military activity.  Trading levels reflect the same uncertainty (i.e. oil/yields are certainly higher, but also not nearly as high as they were in May). Market Movement Recap 08:46 AM Weaker overnight after Trump says ceasefire is over. But not much weaker. MBS down 3 ticks (.09) and 10yr up less than 1bp at 4.561 10:44 AM MBS down a quarter point and 10yr up 3.4bps at 4.586 01:22 PM No major reaction to 10yr auction. MBS down 6 ticks (.19) and 10yr up 2.5 bps at 4.577