MBS RECAP: Bonds Show Their Hand After Morning Head-Fake

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Posted To: MBS Commentary

Modestly strong overnight session gave way to losses following Retail Sales data Bonds never went too red and then gradually found footing No major motivations for rally in terms of data or related markets But the general trend is lower in both stocks and bonds over the past few days 10's broke below 1.72 to close. Fannie 3.0s gained 5 ticks It turned in to quite a nice afternoon for bond markets after a morning that wasn't too offensive in its own right. Treasuries were stronger overnight as markets traded "risk-off" (sell stocks/buy bonds) during Asia's trading hours. European hours brought a sideways consolidation of that move, but Treasuries managed to hold their ground even as European bond yields spiked. Retail Sales came in much stronger than expected at 8:30am…(read more)

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