MBS Day Ahead: Bonds Playing Defense Amid Slow Summer Backdrop

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Posted To: MBS Commentary

Yesterday saw the lightest Treasury volume of any full trading day so far this year. That's no great surprise in July, as this tends to be the month that marks the true start of summertime absences among market participants. If you've encountered the term " doldrums " before, that's what we're dealing with. The doldrums used to be a much bigger deal back in the day before important trades could still be made from most vacation destinations. But even now, there's still a palpable shift in the pace of trading, on average (there are isolated exceptions, but they tend to be big). Bonds have been doing pretty well in June and early July, with a downtrend in yields since the week with the Fed and ECB announcements. Muddying the waters a bit was the fact that the latest…(read more)

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