MBS RECAP: Bonds Prove They’ll Still React to Econ Data

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Posted To: MBS Commentary

Today had potential to be one of those days where overnight give way to a frustrating sell-off that intensifies throughout the day. In fact, that wouldn't have been hard to imagine just before this morning's ISM Manufacturing data. Yields were as low as 1.46+ in Europe, but had been steadily moving higher into domestic hours, ultimately approaching 1.51% before the data. After ISM came out MUCH weaker than expected, the tone changed briefly but dramatically. 10yr yields almost instantly hit new lows for this rally cycle (1.429%). We were wondering how much weakness or strength in the data it would take to produce a response given the current focus on trade war news and geopolitical events. This was clearly weak enough to provide and answer, but even then, traders weren't interested…(read more)

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