MBS Day Ahead: Be Really Careful Today


Posted To: MBS Commentary

Overnight volume in bond markets is about as high as I've ever seen it . In general, we use a benchmark of 1 million 10yr futures contracts as the bar that needs to be cleared in order for bonds to be considered "actively traded" on any given day. That needs to happen by 5pm ET, to be clear. The overnight session saw more than 1 million contracts by 6am–well before the domestic session even began. In other words, this has clearly been a huge deal for the market. That said, there's a very real possibility that it was a 1-day deal. With that much volume and without an extension in the bond market rally, we're faced with the possibility that we just experienced a "flash crash" type event in stocks and that–like every other correction in the past 8 years–this…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Show Buttons
Hide Buttons