Market Volatility Amid Tariff Headlines: A Rollercoaster of In-Range Movement
If you’ve been keeping a keen eye on the market today, you may have noticed the rollercoaster ride of volatility driven by tariff headlines. The day kicked off with bonds showing strength, only to quickly shift gears and bounce back to unchanged territory within the first half-hour. A rally ensued after some key data was released, but just as quickly, it lost steam, leading to a selling spree that brought everything back to square one right before the market closed at 3pm.
In the midst of all this market drama, 10-year yields swung within a 9 basis point range, with most of the action packed into a mere 4 basis points. While tariff updates certainly played a role in this in-range volatility, they have yet to establish a clear big picture trend. One notable event was the sharp sell-off following news of a delay in tariffs on Mexico until March 1st, which stirred up some frenzied trading.
S&P Manufacturing PMI and ISM Data: Key Players in the Market Dance
The release of important data, such as the S&P Manufacturing PMI and ISM Manufacturing PMI, added fuel to the market fire today. The S&P Manufacturing PMI came in at 51.2, surpassing the forecast of 50.1 and the previous figure of 49.4. On the other hand, the ISM Manufacturing PMI clocked in at 50.9, beating the forecast of 49.8 and the previous number of 49.3. Additionally, ISM Prices rose to 54.9, outperforming the forecast of 52.6 and the previous reading of 52.5.
As the morning unfolded, the market saw some strength in bonds while stocks took a hit on the latest tariff announcements. MBS prices rose by 1 tick, while 10-year yields dropped by 2.9 basis points, settling at 4.508.
The Aftermath of the 10am ISM Data Release
Around 10am, the market experienced a whirlwind of activity surrounding the release of the ISM data and the news of a pause in US/Mexico tariffs. MBS prices took a hit, dropping by 1 tick to 0.03, while 10-year yields surged by 1.1 basis points to 4.526, hovering near the day’s lowest levels.
Despite the earlier turbulence, the market managed to hold a relatively narrow range for most of the afternoon, albeit at the lower end of that spectrum. MBS prices were down by 2 ticks at 0.06, with 10-year yields slipping by 0.3 basis points to 4.534.
Heading into the late afternoon, the market saw a slight dip from the day’s peak levels. MBS prices were down by 3 ticks at 0.09, and 10-year yields climbed half a basis point to 4.54, showcasing the ebb and flow of market sentiment throughout the trading day.
As investors and traders navigate through the choppy waters of market volatility, staying attuned to key economic indicators, geopolitical developments, and tariff updates remains crucial for making informed decisions in an ever-changing financial landscape. While today’s market performance may have been a whirlwind of ups and downs, it serves as a reminder of the unpredictable nature of the markets and the importance of staying vigilant in the face of uncertainty.
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