MBS RECAP: Strong, Uneventful December Monday

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Posted To: MBS Commentary

There will definitely be a theme in the recap commentary for the rest of the year: holidays! It's hard to quantify exactly what the holiday season does to financial markets, but most obviously, volume and liquidity wane. As long as no imbalances crop up, that can be a recipe for boring trading. But if the scales are tipped too far in one direction, the movement can be quicker. Today saw a few examples of this phenomenon. Earlier this morning, buyers gained the upper hand on a flurry of short-covering. This helped bonds start the day in stronger territory. Late day strength in European bond markets helped Treasuries and MBS go into the noon hour at the day's best levels. True to most analysts' outlook for today, the only notable event was Yellen's 1:30pm speech . The speech itself…(read more)

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