MBS RECAP: Unofficial 4th Day of Weekend Leaves Bonds Slightly Weaker

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Posted To: MBS Commentary

Today was a total dud in terms of volume and volatility. That's not all that uncommon on the Tuesday following a 3-day weekend, especially if there are no major events or headlines. Overnight bond market movement was dictated by an ongoing trend set into motion late last Friday when bonds found the limit of their near-term bullish potential. In other words, bonds rallied rather nicely into the late morning hours as short-sellers covered those short positions. From that point on, volumes decreased and there wasn't enough organic buying demand to maintain the relatively lower yields. European bond markets led another move toward higher yields when they opened at 2:30am ET, but those proved to be the highest yields of the session. EU and US bonds rallied fairly steadily until the 9:30AM…(read more)

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