MBS Day Ahead: Stocks and Bonds Telling Different Stories


Posted To: MBS Commentary

This morning's key data release is already out and it's already proven to be a dud (MBS Live members can read the update HERE ). So we'll head to higher altitude to check in with bigger picture trends to see what might be on markets' minds. The stock vs bond relationship has been interesting lately–more interesting than it had been a few months ago when bonds were much more willing to react to Italian drama (thus making for sporadic correlations). Now it's summertime! That means, all things being equal, that bond traders are more willing than normal to look elsewhere for cues. And one of the biggest 'elsewheres' is the stock market. With that in mind, we can see ample correlation between the two in the top section of the following chart. In the lower section, we…(read more)

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