MBS Day Ahead: Still Consolidating Recent Losses Ahead of Fed

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Posted To: MBS Commentary

In the early overnight session, the policy announcement from the Bank of Japan (BOJ) was a bit of a downer for global risk markets. It wasn't that it deviated from the consensus, so much as it confirmed it. Specifically, there were no new easing measures announced, and the BOJ did sort of a half-hearted job conveying future easing potential. As such, we begin the domestic session with equities markets in somewhat of a downbeat mood and with bond markets slightly improved . That can be seen in the top section of the following chart. The lower section zooms out and focuses specifically on Treasuries. The message there is that bonds are still simply just consolidating recent losses. The past 2 days (granted, this one isn't over yet) haven't even moved outside the range set on Friday…(read more)

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