MBS RECAP: Bumpy Start For Bonds in December

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Posted To: MBS Commentary

As the bond market shook off the holiday weekend lethargy and metaphorically (and literally) returned to the office, it was met with an immediate barrage of selling triggers . Stronger Chinese data and an absence of trade deal escalation pushed stock prices and bond yields higher right out of the gate. Surprising election results in Germany (winner seen spending more public money = more debt issuance = higher yields) along with stronger econ data in the Eurozone sent German Bunds soaring. Treasury yields followed. Weakness was running on pure momentum heading into the domestic hours and it wasn't until a weaker reading in the ISM Manufacturing PMI that bonds finally found their footing . While the initial reaction was sharp, noticeable, and bond-friendly, it only served to send yields sideways…(read more)

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