MBS RECAP: MBS Significantly Outperform as Treasuries Tank

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Posted To: MBS Commentary

Treasuries tanked today and there were none of the sort of obvious catalysts you'd hope to see. I checked my math on that with people smarter than me and the conclusion was the same. Granted, we can all point to things that probably aren't helping: some anecdotal trade deal traction over the weekend, stronger EU econ data overnight, new month tradeflows, and supply-related concessions. But if Treasury yields were lower today, there would be no reason to mention any of those things. Perhaps the only thing truly worth mentioning (apart from the market movement itself) is the fact that MBS were almost totally immune from the Treasury trouble. This adds to the case that "supply" (Treasury auctions and corporate issuance) is a factor in the sell-off. But MBS have been so weak vs…(read more)

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