MBS RECAP: In Like a Lion. Out Like a Slightly Less Angry Lion

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Posted To: MBS Commentary

I wouldn't go so far as to say this week of bond market movement went "out like a lamb," but at the very least, it wasn't nearly as brutal as the first 4 days. Yields were almost perfectly unchanged in the overnight session, but began to fall in the morning hours after Trump talked tough on China and called for a 1.0% rate cut from the Fed. Bonds didn't get too carried away and instead began to consolidate heading into the PM hours. Sleeping dogs (or were they lions?) were not left to lie, however, as Trump clarified earlier comments on the US "not doing business with Huawei" only pertained to Federal departments and not the nation as a whole. This was taken as a positive trade war anecdote and thus benefited stocks and hurt bond yields noticeably. With that…(read more)

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