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Bond yields hit highest levels in over a year as oil lifts rates

Mortgage-backed securities fell 10 ticks, while the 10-year Treasury rose 4.2 basis points to 4.706%.

Reported · Written up by our desk · Economy

Mortgage-backed securities and Treasuries came under renewed pressure as oil moved higher again overnight, weighing on the bond market and the Fed rate outlook, according to Mortgage News Daily.

With yields near long-term highs, traders appeared reluctant to step in and buy lower bond prices, while earnings season and the prospect of corporate issuance reduced demand for Treasuries and MBS.

The report also points to MBS underperformance, which it says could reflect a repricing of extension risk and shifting positioning among MBS-heavy investors, along with broader defensiveness ahead of the ECB.

Overall, Mortgage News Daily said the move left bond yields at the highest level in over a year and pushed mortgage rates higher as markets stayed mixed, citing MBS down 10 ticks and the 10-year Treasury up 4.2 basis points to 4.706%.

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