MBS RECAP: Holiday Trading Mode Engaged


Posted To: MBS Commentary

"Holiday trading mode" doesn't guarantee uneventful, sideways bond market momentum, but it does up the chances. Actually, it's probably fairer to say that "holiday mode" means trading doesn't have to make sense . Liquidity and participation get light and strange. Some moments might see active trading with ample liquidity, while other moments, it's like a ghost town. Those ebbs and flows of liquidity can grease the skids for quicker moves between the highs and lows, but that's where "holiday mode" has your back: it helps keep a lid on the highs at the expense of a bit of a floor on the lows. A quick glance at the 5-day chart makes the holiday "ledge" quite obvious. Heck, I don't even need to put trendlines on the past 2 days to…(read more)

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