Rally Reverses, Leaving Bonds Weaker in The Afternoon

Rally Reverses, Leaving Bonds Weaker in The Afternoon The day began with promise, but devolved into yet another disappointment. After being almost a quarter point higher at 10am, MBS slid to an eighth point loss by the close. 10yr yields were as low as 4.44% early but were as high as 4.48% in the final hour of trading. Just as frustrating as the weakness is the fact that there's no discrete scapegoat in the news or data. That said, oil prices were also moving higher during the bond sell-off. Given the absence of war-related headlines, some traders could be getting antsy due to a lack of progress in the first of Trump and Xi's 2 day meeting. Ahead of the event, there was some speculation that it would be a venue to announce a peace deal. Econ Data / Events Continued Claims (May)/02 1782.0K vs 1790K f'cast, 1766K prev Import prices mm (Apr) 1.9% vs 1.0% f'cast, 0.8% prev Jobless Claims (May)/09 211.0K vs 205K f'cast, 200K prev Retail Sales (Apr) 0.5% vs 0.5% f'cast, 1.7% prev Retail Sales Control Group MoM (Apr) 0.5% vs 0.4% f'cast, 0.7% prev Market Movement Recap 08:30 AM No drama in Retail Sales data. MBS up an eighth and 10yr down 1.8bps at 4.446 11:06 AM Minimal change so far. MBS up an eighth and 10yr down 1.2bps at 4.452 02:26 PM MBS up 2 ticks (.06) on the day, down just over an eighth from the AM highs. 10yr yields are still down 1bp on the day at 4.455 03:25 PM Weakest levels of the day with 10yr now up 0.1bps at 4.465. MBS are still up 1 tick (.03). 04:19 PM More selling. MBS down 3 ticks (.09) and 10yr up 1.9nps at 4.484