Yesterday, U.S stocks lagged given a spike in U.S Treasury yields. Resilient U.S economic indicators built on other concerns (i.e. trade policy, extension of U.S territorial expansion) pushing yields up. The S&P 500 retraced -1.1% as growth factor slipped while defensives got bid. The 2yr and 10yr yields rose steepening to +38bps, the 10yr auction had soft demand, and the 10yr yield settled at 4.68%. Today, global yields continued rising overnight and UK Gilt yields reached the highest since 2008 infusing volatility in the pre-market. Following Fed Waller’s dovish remarks, yields eased a touch as investors digest incoming administration policy uncertainty. However, U.S yields are overall testing 2023 highs (chart below). U.S jobs data was mixed (chart below) and MBA Mortgage Applications declined as the 30yr mortgage rate climbs near 7%. Pricing action has a cautious tone, so the 30yr U.S Treasury auction and FOMC Minutes will be closely watched later on. The S&P 500 and the Dow are both off by -0.2%. VIX climbing to 18 and 1d vol rising above its major moving averages.

Tomorrow, the U.S equity market is closed, and the bond market closes early at 2:00 P.M EST in observance of the National Day of Mourning for President Jimmy Carter.