Juxtaposition of Escalation and De-escalation Keeping Bonds Volatile

Juxtaposition of Escalation and De-escalation Keeping Bonds Volatile Tuesday was notable for financial markets' attempts to trade the Iran war due to the conspicuous juxtaposition of newswires that spoke to opposing developments. Around 1pm ET, troop deployment news sent yields to the highs of the day. A little over an hour later, the newswires gave the impression that the war was almost over--so much so that bonds were willing to retrace most of the 1pm losses. Nonetheless, yields were already elevated by 1pm, which means it was a weaker trading session overall. Material developments in the war will continue to be more actionable for markets than scheduled economic data--especially this week.  Econ Data / Events Labor Costs 4.4 vs 3.5 f'cast, -1.9 prev Market Movement Recap 08:51 AM Losing ground in choppy trading as oil rebounds. MBS down a quarter point and 10yr up 4.2bps at 4.389 09:54 AM weakest levels. MBS down 11 ticks (.34) and 10yr up 6.2bps at 4.409 12:30 PM Off lows, but choppy.  MBS down 5 ticks (.06) and 10yr up 2.6bps at 4.373 01:03 PM Bumpy 2 year Treasury auction causing weakness.  MBS down 3/8ths again and 10yr up 7.2bps at 4.42 03:33 PM recovering a bit after "war over soon" headlines. MBS still down 6 ticks (.19) and 10yr up 3.8bps at 4.385