MBS Day Ahead: Bonds Back in March’s Range

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Posted To: MBS Commentary

The month of March was characterized by 10yr yields repeatedly bouncing at a floor of 2.80% in terms of 10yr yields. At the time, I argued that–while we were indeed seeing 2018's first correction after the nasty little sell-off in the first 45 days of the year–there wasn't much by way of apparent justification for bonds to improve in a major way from there, given the many headwinds that won't be going away any time soon. One of the "yeah buts" in my caveat quiver was just the sort of panicked sell-off we saw in equities markets. To be fair, I thought it would have taken a bit more weakness in stocks than we actually saw in order for bond yields to break below 2.80%. Apparently, the threat of a break below early February lows in stocks was enough to coax bonds outside…(read more)

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