MBS RECAP: Bonds End Roughly Flat After a Few Lead Changes

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Posted To: MBS Commentary

First thing's first: putting too much time/thought into the writing or reading of bond market analysis this time of year isn't really necessary. If that changes, rest assured I'm watching out for such things and ready to discuss them. If it doesn't change, however, well… this is going to sound fairly familiar. The biggest market mover of the day was illiquidity , with light volume a close second. These 2 factors (typical of the 2nd half of December) grease the skids for an imbalance between buyers and sellers to have a bigger impact than it normally would. The net effect is movement in bonds WITHOUT any overt justification. Two such moves emerged today, first in the late morning hours when bonds rallied down to slightly stronger yield levels and then in a more gradual way…(read more)

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