MBS RECAP: Bonds Pulled 2 Ways by Stocks and Global Gloominess

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Posted To: MBS Commentary

Remember the middle of 2016 when rates managed to make it all the way back in line with all-time lows despite having almost no justification in terms of economic data and policy outlooks? Those low rates were mostly about Brexit . Something about Brexit is utterly captivating for global financial markets. When it first happened, there was a bit of an anticlimactic response, largely due to the time window involved in working out the nuts and bolts. Now more than 2 years later, we're getting into the more serious phases of the process. Markets aren't nearly as rattled as they were in 2016, but shifts in potential Brexit outcomes have nonetheless been relevant market movers this week. In general, they made a case for bond market gains (i.e. lower rates) this morning, and never really reversed…(read more)

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