MBS RECAP: Markets Willing and Able to Shrug Off Cohn Resignation

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Posted To: MBS Commentary

The resignation of White House Economic Advisor Gary Cohn thew markets a curveball when it was announced after the close of business yesterday. Currencies (which trade 24 hours a day) and Treasuries futures (which began trading shortly after the news) quickly confirmed that the reaction would be good for bonds and bad for stocks. "Good and bad" are relative terms in this case, because none of the movement was on the scale of more dramatic recent movements. Nonetheless, S&P futures lost a quick 40 points and 10yr yields rallied a quick 4-5bps. That was nice while it lasted. Although bonds did managed to hold most of the gains until the start of the domestic session, the 9:30am NYSE open showed that investors were ready and willing to shrug off the Cohn news. Stocks and bond yields…(read more)

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