MBS RECAP: Big Help From Europe; NFP Up Next

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Posted To: MBS Commentary

Today was all about the European Central Bank's surprisingly bond-friendly announcement and press conference. Considering markets already expected (and had largely priced-in) a friendly ECB day, The fact that the ECB was able to deliver a rally-worthy release is impressive. The details check out. They said rates would stay low at least through 2019 They unveiled new targeted loans, as rumored several days ago They revised growth/inflation forecasts sharply lower Draghi said near-term growth outlook was weaker than expected and that risks are tilted to the downside Draghi said inflation is likely to decline later this year Between the 7:45am ET announcement (official text) and the 8:30am Draghi press conference, European bonds had a friendly double whammy that dropped yields to the lowest…(read more)

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