MBS Day Ahead: Correction to The Correction. Does it Matter?

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Posted To: MBS Commentary

In the day just passed, bonds saw their first reprieve from the fairly brutal correction that has defined essentially all of September. 10yr yields dropped all the way to 1.81 after having broken above 1.90 in the previous session, but they weren't able to hold all of those gains. Drone strikes on Saudi oil facilities served as the key market mover (and a great reminder that oil prices definitely don't always correlate with bond yields). In the day ahead, we can ponder whether it was geopolitical unrest that truly sparked the correction or if it's something we would have seen yesterday simply because it was time to see it. The big bad correction had just gotten big enough to suggest it was getting to be that time, and the 1.80-1.94 range coincides with rates being in limbo between…(read more)

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