Unstable Day Thanks to Central Banks And, Eventually Oil

Volatile Day Thanks to Central Banks And, Ultimately Oil

1 Hour, 23 Min ago

Volatile Day Thanks to Central Banks And, Eventually Oil

Bonds took a break from their lock-step tango with oil rates for most of today’s session rather focusing on European Central Bank (ECB) policy news. Secret factors to consider consisted of a sharply higher inflation projection, warnings of additional upside risks, and a repricing of rate hike (not cut) expectations for 2026. Combined with the other day’s bad reaction to the Fed, the front end of the yield curve got hit hard– specifically in the morning– and the discomfort radiated external from there. Throughout the selling spree, oil prices were remaining well behaved. It wasn’t up until completion of the day that geopolitical headings helped oil costs drop dramatically, bringing bond yields along for the trip.

• • Continued Claims (Mar)/ 07
    • 1,857 K vs 1850K f’cast, 1850K prev
  • Jobless Claims (Mar)/ 14
    • 205K vs 215K f’cast, 213K prev
  • Philly Fed Service Index (Mar)
    • 18.1 vs 10 f’cast, 16.3 prev
  • Philly Fed Prices Paid (Mar)
    • 44.70 vs– f’cast, 38.90 prev

08:20 AM

moderately weaker overnight. with the majority of the losses seen in the last 2 hours. MBS down a quarter point and 10yr up 4.7 bps at 4.308. 2yr yield is up twice as much as market responds to Fed day

10:17 AM

Back to the same in MBS and up half a bp in 10yr at 4.267

02:41 PM

Off best levels. MBS down 6 ticks (.09) and 10yr up 2.3 bps at 4.284

03:08 PM

MBS back to unchanged and 10yr now down 1.8 bps at 4.245 on headlines recommending Strait of Hormuz could reopen.

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