MBS RECAP: Another Day With Trade War in Focus

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Posted To: MBS Commentary

For the second straight day, US/China trade relation uncertainty dominated financial markets. Volume was up across the board with Treasury yields and stock prices (S&P futures, intraday) dropping to the lowest levels in more than a month . Stocks eventually bounced back a bit in the afternoon, but nonetheless remain very close to 1-month lows. At issue was last night's news that Trump's weekend trade tweets had teeth . In other words, there really was a reason to announce increased tariffs on China to be implemented this Friday. Between Mnuchin and Lighthizer, we were informed that the trade talks had soured and that China had reneged on previous agreements. Lighthizer additionally confirmed the play to raise tariffs. Now… all of the above COULD be part of an elaborate negotiation…(read more)

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