What Happened Last Week?
Rough Week for Bonds. No Help from Friendly Data.
Bonds managed to recover modestly after the initial yield spike in Friday’s morning hours, but nonetheless earned the honor of seeing the biggest week over week jump in 10-year yields since 1981 (note: some outlets are saying 2001 or 1987, but it doesn’t really matter. It was a rough week, is the point). Looked at as a 2-week time frame, it was on par with many other recent examples of moderately brisk selling. That leaves this week and a half in a great position to let experts know how freaked out they should be.
Source: Matthew Graham, Mortgage News Daily 4/11/2025)
What’s on the Agenda for This Week?
Overview
Last week saw some very large moves, this week sees more volatility.
Three Things
The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) Tariffic, (2) The Talking Fed and (3) Central Bank Palooza.
(1) Tariffic: The bond market will continue to be very sensitive to primarily the China/US tariff/Trade War discussions.
(2) The Talking Fed: Fed Chair Powell and many others will speak this week. How likely is the Fed going to step in with lower rates to offset the economic disruptions from supply chain issues with China and tariffs?
- 04/14: Barkin, Bostic, Waller, Harker
- 04/16: Powell
- 04/17: Barr
(3) Central Bank Palooza: Interest rate and policy decisions will be issued out of the Bank of Canada and the European Central Bank this week.
Treasury Dump
There will be an important 20-year Treasury bond auction on Wednesday.
Market Wrap-up
Domestic Flavor
Inflation Nation: Countering the biased UofM Consumer Sentiment Index, the NY Fed’s Inflation Expectation survey actually showed 12 month inflation expectations dip from 3.0% to 2.9%.
Tariffic: President Trump says that he wants to “help” “some” car companies and the White House says that they have already received some “amazing” deals with countries over tariffs and that as a result, a recession will “100% not happen”. This certainly helped bonds in afternoon trading.
On Deck for Tomorrow: Import and Export Prices, Empire Manufacturing Index.