MBS Day Ahead: Thanksgiving Week Trading Themes Trying to Show Up Early

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Posted To: MBS Commentary

Daily and overnight trading volumes have been declining, and intraday trading ranges have been getting more narrow. The starting point for that trend was the day after November 7th (when all the news hit about tariff roll-backs seemingly being in the bag for the US/China trade deal). By the beginning of the following week (last week), we had the White House saying no rollback had been agreed to. At the same time, bonds were working through the 2nd biggest week of corporate bond issuance of the year and breathing a sigh of relief as Powell did no harm during his congressional testimony. A mid-week Trump speech also lacked any of the trade deal optimism that has been a constant enemy of low rates. In short, there was a big blow-up for yields 2 weeks ago and then multiple reasons to recover last…(read more)

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