MBS RECAP: Relatively Strong Show of Support For Bond Markets

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Posted To: MBS Commentary

Bonds were facing headwinds as the week began. Friday had just seen an exceptionally strong NFP. Yields were quickly pushing toward the higher end of their post-Brexit range. And significant "supply" –both from corporate bonds and scheduled Treasury auctions–was yet to come. Indeed, it looked as if we were risk of seeing the range break on the unfriendly side. But today has gone a long way in calming those fears. After hitting 1.616% yesterday, 10yr yields were as low as 1.535% today. Domestic economic data didn't hurt, with Productivity coming in at -0.5% vs a median forecast of +0.4%, but bonds look like they would have rallied regardless . Interestingly enough, it was actually "supply" that helped get today's party started, but not quite the same supply we were…(read more)

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