MBS RECAP: Another Strong Auction Helps Bonds After China News Debunked


Posted To: MBS Commentary

Yesterday morning's news regarding China potentially buying fewer (or selling) US Treasuries has been a big talking point. While most pundits and even a few traders jumped on the bandwagon right off the bat, we immediately flagged it as a Red Herring . By the end of business yesterday, there were a few good news stories that also began to push back on the suspicious assertion. But the best push back came from China itself, with the State Administration of Foreign Exchange going on the record saying that the news either quoted the wrong sources or was altogether fake . Enough of the market was conned into selling bonds based on yesterday's fake news that today's real news provided a bit of a rally opportunity overnight. The bigger move hit bonds in a negative way just after the European…(read more)

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