Treasuries and MBS are heading out the door in very similar territory to Friday’s latest levels. This is something of a relief considering they looked to be on the run on Friday Afternoon. The culprit was an ostensibly game-changing headline suggesting that the growing numbers of Russian troops on the Ukrainian border was simply due to military drills and that those drills were now over.
Then today, new headlines emerged indicating that a top NATO official still sees a high risk escalation. A separate headline cited a Ukrainian military spokesman as saying Russia had 45,000 troops on the border with tanks, missiles, planes, and helicopters. Whether or not these counterpoints to Friday’s headline ultimately helped bond markets today isn’t entirely clear, but they certainly didn’t hurt.
Trading ranges stayed fairly narrow. MBS improved very slightly most of the day while Treasuries were under more pressure early, but then improved more noticeably heading into the afternoon. The positivity pulled back just after 2pm, leaving trading levels close to unchanged.