Bonds embarked on a surprisingly swift move in a surprising direction following a resoundingly solid jobs report.  Such rallies often demand that justification be pieced together from whatever happened to be available in hindsight.  In today’s case, the bigger pieces include some combination of massive short covering sparked by another round of British central bank headlines.  There are a few other candidates discussed in today’s video, and that’s definitely worth the watch if you’re struggling to understand or accept today’s craziness. 

08:40 AM

Volatility after jobs report.  Initial losses followed by a bounce back to stronger territory, and now another bounce to roughly unchanged levels.

09:34 AM

Surging back into positive territory now, perhaps with some help from more friendly BOE comments.  10yr down 3.5bps at 1.495 and MBS back up to ‘unchanged.’

11:44 AM

Snowball rally and a pain trade for those who’d been shorting the bond market.  10yr yields down almost 8bps at 1.453.  2.5 UMBS up almost 3/8ths of a point.

01:31 PM

The snowball has stopped rolling at the close of the EU session with 10yr yields coasting along the 1.46% technical level.  MBS at best levels, up 3/8ths of a point.