MBS RECAP: With Shorter Lines, Bonds Get More Time on Favorite Rides


Posted To: MBS Commentary

In the amusement park that is financial markets, each asset class has a few favorite rides. When the place is packed, it's tough for any given asset class to take too many turns on any given ride within a certain amount of time. A big old rally is the bond market's favorite ride, but an ample supply of warm bodies at trade desks often serves to limit how often they can take that ride without good reason. But the theme park was much less crowded today as warm bodies are increasingly out of the office for an extended weekend thanks to an early close tomorrow and full closure on the 4th. Shorter lines means those left in the park have their run of the place. Even if this wasn't the underlying motivation for today's gains, it definitely made those gains bigger than they otherwise…(read more)

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