US bond markets experienced a rally in response to the lack of clarity on trade policy under President Trump’s executive orders, with futures gaining overnight. The news had little impact on Monday’s gains, and volatility remained low.
Initial tariffs were referred for research and comment, which sparked a rise in bond prices despite the absence of new economic data driving the move. Treasury futures saw modest gains, with 10-year yields down by about 5 basis points (0.05%) to 4.577%. Mortgage-backed securities (MBS) also rose, up 6 ticks at 2.19% and MBS remained stable, despite a slight drop in 10-year yields.
The overnight session was relatively calm, with bond prices holding gains rather than experiencing significant fluctuations.
Source: https://www.mortgagenewsdaily.com/markets/mbs-recap-01212025