MBS Day Ahead: Bonds Hope For Friendly Draghi and “Risk-Off” Roll-Out of Tariff Plan


Posted To: MBS Commentary

European Central Bank (ECB) President Mario Draghi's press conference (which follows the scheduled ECB policy announcement) could set the tone for bond markets this morning. And that tone could spill over to Treasuries more than normal due to a lack of domestic data. Spillover aside, US bond markets would be hard pressed to make a major move into stronger territory with tomorrow's NFP data looming . As the chart shows, European bond yields (Germany is the benchmark) have been calmer relative to Treasuries this year, and arguably led the way for the late February shift. In the past week, European yields began to rise–perhaps due to anxiety over today's ECB message. As of this morning, German Bund yields are right on the edge of an important technical level at 0.70%. Simply put,…(read more)

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