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Bonds Attempt to Rally, But Staying Red For Now

Bonds made initial gains in the overnight session and were briefly in positive territory shortly after European trading began (around 4:15am ET).  But the order of the day in Europe ended up being negative for the bond market with German Bunds rising more than 3bps from trough to peak.  Treasuries followed and thus began the domestic session nearly 2bps higher at 2.43+.

There was a bit of a resilient push over the past hour with both MBS and Treasuries nearly making it back to 'unchanged' levels.  But both have now firmly bounced, and almost perfectly in line with yesterday's weakest levels.  In other words, the MBS price floor from yesterday is acting like a ceiling today.  The 10yr yield ceiling from yesterday is now acting like a floor.

It's a bit too soon to say that this will continue to be the case for the rest of the day, but it that happens, it would be a fairly strong technical signal suggesting negative momentum is intact.

10yr yields are currently up less than 1bp at 2.428 and Fannie 3.5 MBS are down 1 tick (0.03) at 101-02.

MBS / Treasury Market Data

UMBS 5.5
99.48
-0.17
UMBS 6.0
100.94
-0.08
2 YR
4.6221
+0.0541
10 YR
4.2008
+0.0128
Pricing as of: 3/28 2:15PM EST
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