Good Friday AM,
Bonds are under a bit of pressure but overall doing fine. They’ve had a good run for the past two weeks and its just time for a pullback. It is never a straight line up or down. From a technical standpoint, .60 on the 10-yr is a pretty hard line to cross and each time we touch it and get rejected, the yield jumps a few basis points and we being the walk back down to .6 or at some point, hopefully lower. The optimism in bonds is high, and while it can stay high for an extended period, it will fade for a (likely) small reset. At the moment we remain range bound, the FED continues to be a buyer and we do not know the range the FED is targeting, so this could be a safety net. All this said, it still (sort of, as the Fed has dispensed with any normal/market driven trading) comes down to supply and demand. There is a huge supply of Mortgage bonds hitting the market and if the Fed slows down its purchases, this could pressure prices as well.
A few fun facts from the WSJ on how the other half is doing:
Please remain safe and stay healthy; enjoy the weekend and make today great!