MBS RECAP: Bonds Bounce; Stocks/Oil Were No Help


Posted To: MBS Commentary

Stocks and oil still questionable as primary motivators for bonds European bonds and Treasuries suffered a tradeflow/technical reversal Stocks and oil definitely didn't help intermediate range is still intact, but trend is under attack Bond markets have been increasingly looking like they had run out of steam after yields bottomed out last Thursday. It's not uncommon for big moves like that to "flush out" trading positions. Sometimes referred to as a 'short squeeze,' this dynamic involves traders who were betting on rates moving higher after April 5th's lows could subsequently being forced to cover those bets as rates improved on Thursday. Yesterday's sharper spike in European bond yields served as a warning shot , of sorts, but it wasn't too alarming considering…(read more)

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