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Treasury buyback news drives intraday rally, steep yield curve trade

By the open and into the close, 30-year yields were about 10 bps lower while 2-year yields were a few bps higher, reflecting shifting demand toward specific maturities.

Reported · Written up by our desk · Government Bonds

Mortgage News Daily said most of the day’s rally followed coverage of a Treasury buyback program, which the outlet framed as a maturity trade rather than broad monetary-style accommodation.

The outlet said the news effectively pushed the impact onto shorter-term debt at the expense of longer-term debt, pointing to movement across the yield curve. It noted that 30-year yields were nearly 10 bps lower at the open versus later levels, while 2-year yields were a few bps higher.

Mortgage News Daily added that oil prices moved sharply intraday, dropping to lows at 8:35am, rising into the 1pm period, then falling back near the lows by the close.

The outlet also tied the oil swings to intraday bond volatility, citing that the 10-year yield fell about 6.2 bps to 4.643 and that MBS rose by roughly a quarter point.

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