MBS RECAP: Bonds Bounce Back After European Close

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Posted To: MBS Commentary

Bond market holiday inertia would have been happy to continue were it not for a relative smattering of drama in European bond markets overnight. In fact, the inertia at home DID ultimately continue, but that wasn't obviously going to be the case earlier this morning. At times, 10yr yields were more than 5bps higher than Friday's latest levels. While I'm more than content to chalk almost any movement at this time of year up to temporary and inconsequential forces, I can appreciate that a move of that size is interesting enough to discuss a bit further. In today's case, it was entirely a European affair, as the following chart will show. Simply put, US yields were flat and boring until European markets opened. A surge toward higher yields in Europe precipitated some spillover…(read more)

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