MBS Day Ahead: Rates Are Low, But How Low Should They Be?

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Posted To: MBS Commentary

In the day ahead, bonds will digest manufacturing PMI data, both from IHS-Markit and ISM. While these PMIs are typically big market movers–potentially, at least–the impact of economic data is generally muted for now. Investors know things are bad. They don't need data to confirm it. Markets will be more interested to know when things start to improve, and for that, they'll be looking to coronavirus-related data and local government quarantine/reopening policies before economic reports that may take months to reflect reality. All that do say the bond market is just doing its thing until something changes with respect to the coronavirus outlook. " Its thing " can include pretty much any movement inside the recent range (roughly .54 to .67, although the early April highs in…(read more)

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