MBS RECAP: Jobs and Powell Douse Rate Rally

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Posted To: MBS Commentary

Yesterday's recap headline spoke of bonds being on fire in a good way. Apparently word got out . Several party poopers arrived with buckets of water today. The first of these buzzkills didn't get much mainstream press but was arguably armed with just as many buckets as anyone. I'm referring to the overnight bounce in bond yields that ostensibly resulted from the generally overbought levels seen at yesterday's close. To be fair, bonds have been overbought for quite a while, but with each new move into more deeply overbought territory, some sort of bounce became more and more of a risk. Asian and European traders arguably didn't wait for the jobs report or the Fed to validate said bounce. Even so, the jobs report and the Fed validated said bounce! The case presented by the…(read more)

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