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Low liquidity boosts trading swings as rate-hike expectations tick up
Mortgage-backed securities rose about 0.03 and the 10-year Treasury yield slipped roughly 0.5 basis points to 4.697 during the late morning window.
Mortgage News Daily reports that with no major economic data or other clear market movers appearing, thin liquidity left room for traders to have an outsized impact on prices.
Between 9:00 a.m. and 10:30 a.m. ET, the outlet says both stocks and bonds moved lower at the same time, coinciding with an increase in near-term Fed rate hike expectations as reflected in Fed Funds Futures.
Despite the intraday weakness, the outlet cited relatively small directional moves, saying MBS were up 1 tick, about 0.03, while the 10-year Treasury yield was down roughly half a basis point to 4.697.