MBS RECAP: Draghi Helps Bonds Hold Range Ahead of Jobs Report

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Posted To: MBS Commentary

The ECB released a policy announcement this morning. They weren't expected to make any significant changes and indeed they made none. Well, to be fair, they did remove a line about increasing bond purchases if the outlook worsened and there was a very small reaction at first (rates moved higher–mostly in Europe). But Draghi's press conference–which is really what it's all about when it comes to ECB announcements–took bonds in the other direction. Draghi didn't say anything incredibly significant, but 2 comments resulted in noticeable upticks in volume and buying demand: Comment 1: DRAGHI SAYS DECISION DOESN'T SIGNAL CHANGE IN EXPECTATIONS OR REACTION FUNCTION Comment 2: DRAGHI SAYS THERE WASN'T MUCH DISCUSSION ABOUT OTHER POSSIBLE CHANGES The first comment was meant…(read more)

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