Thinner trading volumes in the afternoon have given bond markets some room to run after hours. This is much more evident in MBS, which have seen 3.0s make it back above the morning’s highs, currently down only 1 tick from Friday’s close at 103-14.
10yr yields are still 1.7 bps off Friday’s latest levels and at 1.9667, not quite back to this morning’s lows. Stocks have been fairly equivocal and volumes much lower than in the first two hours of the session. The MBS bounce back is equivalent to a consolation prize. To be clear, it’s very nice to see and it keeps the door open for positive reprices, but it’s not the result of any major underlying shift or market motivation.