MBS RECAP: What Does Microsoft Have to Do With Mortgage Markets?


Posted To: MBS Commentary

We were already defensive, to some extent, about the possibility that last Friday's gains were driven by month-end trading needs . Indeed, there was a noticeable lack of buying demand right out of the gate today (both in the overnight and domestic sessions). But then Microsoft gave bonds an even bigger reason to head toward higher yields–19.75 billion reasons, in fact. Treasuries and MBS are not the only games in town when it comes to bonds/debt/loans/credit. Of course there are auto loans, and you've probably heard of municipal debt as well. But the biggest and most frequently noticeable of these other debt markets is that of corporate bonds. Simply put, corporate bond issuance affects mortgage rates by affecting the overall bond market supply situation. When a corporation issues…(read more)

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