Sideways and Stronger, But Risks Remain

Sideways and Stronger, But Risks Remain Monday was "nice." Bonds rallied more than a little bit and held those gains in an exceptionally flat manner all day. But there are caveats. Apart from last Friday, today's yields matched the long-term highs seen on July 23rd.  Or on a more timely note, the rally didn't fully erase Friday's weakness. Additionally, strength was not a given. It required a fairly substantial drop in oil prices stepping from a fresh round Iran war optimism. This as been a fickle friend to say the least, though we'll never turn down the visit. Ample past precedent is a reminder that things can change quickly  with respect to geopolitics. Last but not least, while econ data had no lasting impact today, Friday's jobs report is on another level. Market Movement Recap 09:50 AM Stronger overnight on war-related de-escalation and lower fuel prices. MBS up 9 ticks (.28) and 10yr down 4.6bps at 4.689 12:03 PM MBS still up 9 ticks (.28) and 10yr down 5bps at 4.686 02:37 PM Super flat. MBS still up 9 ticks (.28) and 10yr down 4.8bps at 4.687