MBS Week Ahead: Sometimes a Correction is Just a Correction

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Posted To: MBS Commentary

Bonds are starting out in weaker territory this morning, mostly due to European trading hours. An improving US/China trade dialogue has been the default explanation for any uptick in stock prices and bond yields recently. Irresponsible or lazy journalists/analysts simply observe the market movement and tack on "as trade tensions flare" in the case of a risk-off move or "as trade tensions ease" in the case of the opposite. I've seen plenty of that garbage this morning, but none of the underlying headlines–at least none that coincide with the market movement. In fact, bonds were mostly flat during Asia-only market hours and didn't start losing ground until European trading began. In order to make a case that the overnight move is tied to any specific event, we'd…(read more)

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