Big Rally, But Not Big Enough to Demand an Interesting Explanation It is unfortunate that, due to timing and a few other factors, a tweet by activist investor Bill Ackman is in the best position to receive credit for sparking a 15bp rally in 10yr Treasury yields. Ackman simply said "we covered our bond short," which means he is a buyer instead of a seller. It could also be taken to mean that he thinks yields have mostly topped out as 10s flirt with 5%. That conclusion is one that much of the market is at least considering according to trading patterns over the past 3 days. Ultimately, it will still take data to confirm, but restlessness is increasing. As for the size of today's move, compared to Friday's close, it was roughly a 6bp rally by today's 3pm CME close--not the sort of surge that demands a big, obvious root cause. Market Movement Recap 09:12 AM Weaker overnight with 10s hitting 5.02 by 530am ET. Pushing back now, but still up 5.3bps at 4.967%. MBS down 3/8ths. 11:24 AM MBS turn green, now up 2 ticks (.06) on the day. 10yr yield down 4.3bps at 4.871. 01:43 PM Gains continue. MBS up a quarter point. 10yr down 7.6bps at 4.838. 03:18 PM Generally flat since the last update. 10yr down 6.6bps at 4.848. MBS up 9 ticks (.28).
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