Encouraged, But Not Convinced

Encouraged, But Not Convinced It is certainly encouraging to see a modestly positive day for the bond market in the wake of a decent 2-day winning streak and despite a modestly stronger PMI number this morning.  To see the 3 day move in the wake of 10yr yields hitting 5.0%+ for the first time since 2007 is perhaps slightly less encouraging.  Either way, the market is at least “pausing for reflection” here.  In other words, there’s no immediate plan to stampede up and over 5.0%, but neither do we have confirmation that rates have turned some epic corner in the bigger picture.  At the risk of falling back on the same old thesis: it’s data dependent. Econ Data / Events S&P Global Services PMI 50.9 vs 49.8 f’cast, 50.1 prev S&P Global Manuf. PMI 50.0 vs 49.5 f’cast, 49.8 prev Market Movement Recap 09:42 AM Fairly flat so far after lower-volatility overnight session.  MBS roughly unchanged.  10yr up less than 1bp at 4.857 11:03 AM Stabilizing after a bit of weakness.  MBS roughly unchanged.  10yr up 2.6bps at 4.874. 02:33 PM Slightly stronger in the PM hours.  MBS up 2 ticks (.06) and 10yr yields down about half a bp at 4.844 03:57 PM Best levels of the day by a mall margin.  MBS up 5 ticks (.16).  10yr yield down 2.7bps at 4.821.