MBS Week Ahead: China Takes Center Stage

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Posted To: MBS Commentary

In the week just passed, bonds set out to react to the Fed announcement and a slew of important domestic economic data. While all of the above exerted SOME influence on the bond market, Trump tariff tweets stole the show on Thursday morning with the announcement of another 10% on $300bln Chinese imports. Stocks and bond yields tanked around the world in unison. US bonds improved at their fastest pace of the week. Notably, however, the Thursday morning trading environment was already pointing toward strong gains. In the week ahead, although there is a smattering of econ data and a Treasury auction cycle, US/China trade relations are in sharp focus after overnight developments. Specifically, China's central bank the PBOC (People's Bank of China) set its currency target right on the borderline…(read more)

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