Decent Recovery But MBS Underperform
Decent Recovery But MBS Underperform
On Thursday, 10yr yields came close to spiking 20bps, trough to peak, in the wake of hotter CPI data and a lousy 30yr bond auction. That's a brisk day of selling and one that didn't line up with this week's theme (adjusting to softer Fed comments and pricing in some safe-haven flows surrounding the Israel/Gaza War). Today's rally started early and stayed strong all night. A pop in consumer inflation expectations brought the rally to an end, but bonds held on to gains without any drama in the PM hours. MBS underperformed along with the short end of the yield curve.
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