MBS RECAP: Early 2019 Bond Market Correction Threat Remains

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Posted To: MBS Commentary

For several weeks heading into the December Fed announcement, we discussed the impressive Nov/Dec bond market rally and the fact that the Fed would likely have the last say about market momentum until the jobs report at the beginning of January. Whether it was due to the jobs report being much stronger than expected, or simply the fact that bonds had become so overbought, the risk of a correction has quickly materialized since last Friday. To be fair, last Friday itself didn't look overly threatening. In the recent context, it merely brought rates back to levels from 2 days prior. Before that, those rates were still the lowest in many months . The first two days of the current week have been a bit more sinister as they've added up to more meaningful erosion of the recent rally. There's…(read more)

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