MBS RECAP: Bonds Remain Stuck in a Waiting Game

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Posted To: MBS Commentary

Treasuries were modestly weaker today, while MBS outperformed by holding mostly steady. That keeps the bond market well within its recent range as well as the longer-term consolidation trend (intact since mid-October). Upward pressure on yields associated with new "supply" (Treasury auctions and corporate bonds), technical resistance, and improved US/China trade tensions is being offset by downward pressure driven by uncertainty over the next major development in the Middle East. A widely-followed survey of bond trader positions suggests the highest level of neutrality since the beginning of 2019 and some of the metrics are the most neutral since mid-2017. This is more a reflection of what we already know than some sort of revelation. A lot is up for grabs at this stage of the economic…(read more)

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