MBS RECAP: Decent Day for Bonds, Despite Complexity and Volatility

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Posted To: MBS Commentary

Today was one of the more complex trading days we've had recently. Three things were certainly in play and 2 of them were interdependent. 1. Stocks 2. Trump's Press Conference 3. 10yr Treasury auction Bonds weren't doing much of anything until stocks opened. Granted, stock futures trade all night, but the 9:30am NYSE open nonetheless marks a major liquidity event . This can spill over to bonds if money managers are adjusting asset allocation or if bond-specific exchange-traded funds (ETFs) are active. In today's case, the NYSE open pushed bond markets to their weakest levels of the day as stocks advanced to the day's best levels. Trump's press conference made for a complete reversal of that trade (stocks and bond yields went lower together. The rationale being passed…(read more)

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