Daily Newsletter: Wednesday August 6, 2025

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More Ground-Holding Despite Weird Intraday Spike

This morning’s commentary led with our desire to avoid jinxing this week’s flat, boring market movement with rates at long term lows.  But for a few minutes mid-day, it looked like the jinx was real. At 11:35am, yields shot 3bps higher in a matter of minutes and in exceptionally heavy volume. Several hours later and there are still no solid explanations for the mini-drama. Thankfully, explanations are less important after Treasuries fully erased the mid-day weakness.  Mystery moves like this happen.  They usually offer clues by end of the trading session, but traders/analysts only tend to ravenously pursue those clues when the day-over-day movement is much larger.  Since today’s wasn’t, this one will be forgotten and chalked up to a very small number of tight-lipped traders making very big moves that caused a mini mid-day snowball. 

Market Movement Recap

10:31 AM Initially weaker overnight, but rallying back since 5am.  10yr now roughly unchanged at 4.214 and MBS up 1 tick (.03).

12:18 PM Big selling at 11:35 and mostly stabilized now.  No explanations available.  10yr was over 4.25, but now up only 1.9bps at 4.233.  MBS are back to unchanged after being down an eighth of a point.

01:26 PM modestly weaker after 10yr Treasury auction.  MBS down 1 tick (.03) and 10yr up 3bps at 4.244

04:11 PM Heading out with MBS up 2 ticks (.06) and 10yr up 1.2bps at 4.226