http://MikesDailyMarketReport.com: The Bank of England's announcement started off our calendar today, as they hiked their rates up by 0.25%. Meanwhile, Initial Jobless Claims rose back up to 200k. Challenger Layoffs announced an additional 3 million job layoffs to come. However, the Continuing Claims dropped about 20k from last week. Labor Costs rose 11.6% in it's initial report for Q1, while Productivity dropped by 7.5%. This latter portion is concerning; especially the Labor Costs, as this is inflationary data. After the Fed provided their announcement yesterday, both Markets rallied quite well (DOW was up over 900 points and MBS closed Up over 60bps). However, today, that rally quickly disappeared and more losses are mounting. DOW is down over 1k so far today and MBS is Down 80bps. The rally started yesterday because the Fed announced they would remove the 75bps off the table for any of their upcoming FOMC, but the 50bps hike would be a strong choice. Today, there's no real clear explanation for it, other than some possible technical positioning. There's a glut of unexpected Corporate Bonds being sold on the Market today, so this could be helping to exacerbate today's MBS losses. There's also a lot of illiquid positions in the Markets, as there's a large gap between the Buyers and Sellers. Meanwhile, Yields have spiked to 2018 levels as they are now just a hair under 3.10%.
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