MBS Week Ahead: For Bonds, Still About Stocks and “The Range”


Posted To: MBS Commentary

January continues playing host to the same level of stock/bond correlation that we typically see at the end and beginning of any given year. Beyond calendar considerations, we also see this behavior during times of uncertainty where investors huddle together and make similar, broad moves toward and away from "risk." While the resulting correlation is far from perfect (there are definitely noticeable departures from the trend), it has been strong enough to keep stocks in mind when considering the forces acting on bond markets at the moment– especially on a day to day basis (bigger picture correlations never look as good). And then there's "the range." We've been following a range in 10yr yields between 2.42 and 2.34%. Indeed, those continue to be important technical…(read more)

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