MBS RECAP: Treasuries Come Out Swinging; MBS Not So Much


Posted To: MBS Commentary

Bonds rallied sharply today on a combination of factors that are debatable in their direct bond market implications. In a general sense, European bond market strength spilled over to the US session. On a specific note, the 2yr Treasury auction definitely served as a catalyst for better buying in the Treasury complex at 11:30am (not a typical auction time). Either way, Treasuries did quite well while MBS struggled to improve. The ongoing breakdown in MBS vs Treasuries is getting more and more painful, depending on your definition of pain. On the one hand, rates are as low as they've been in a long time –either late March, 2019 or early 2018 depending on the lender. That's actually not painful at all! On the other hand , mortgage rates haven't dropped nearly as quickly as Treasuries…(read more)

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