MBS RECAP: Bonds Avoid Committing For Better or Worse


Posted To: MBS Commentary

It was an uneventful day for bond markets from most points of view. After opening slightly stronger in Asia, Treasuries sold-off modestly during the first part of the European session. The key consideration at the time was stronger German inflation data. Logically, this was a bigger deal for Germany and the EU than it was for US bond markets. 10yr Treasuries found a ceiling at 2.496 and held it almost exclusively through the domestic session. On the other hand, they also found a floor just over 2.46 and looked similarly determined to avoid breaking it. The latter is probably more significant in light of the fact that stocks made a strong move lower today (in other words, recent levels of correlation with stocks suggest bonds should have taken a stab at breaking below 2.46). So what are we to…(read more)

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