Heavy Overnight Selling But Inflation Narrative Remains in Doubt

Bonds sold off again overnight with 10yr yields now challenging the 4.10% technical level in early trading. MBS are down another 3/8ths, roughly. And there’s stronger correlation with higher oil prices and rising bond yields. So in light of our contrarian take yesterday, are we now forced to acquiesce to the „higher inflation/higher rates“ narrative?  Not entirely. While there’s no doubt that a certain contingen…