MBS RECAP: Bonds Bounce Back, But Why?

Posted To: MBS Commentary

As far as bond market rallies go, today’s was one of the most mysterious in recent memory. Several conclusions will have to be jumped to in order to assign any semblance of causality. One of the best, simplest arguments for latent bond market strength is the fact that the risk barometer du jour–Yen– had begun a strong move lower (stronger Yen) yesterday. That trend helped arrest yesterday’s rising rates despite relentless stock gains. Then today, as soon as stocks faltered, rates were instantly ready to pay more attention to the Yen move that had continued unabated. If you want to add an extra twist to this narrative, consider this article that came out shortly before today’s rally began. Investors would be considering its point (perpetual legal imbroglio for Trump) moments before…(read more)

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