MBS RECAP: Bonds End Strong Despite Post-Auction Weakness

Posted To: MBS Commentary

Bonds made it 3 days in a row today–rallying to the best levels since mid-January. In fact, apart from Jan 17th, today’s closing yields were the lowest since late November! Why is all this happening? That’s a great question, judging by the various explanations being thrown around among market participants and in financial media. Most of the credit is going to some iteration of “politics,” either in the US or with respect to European elections. That probably has more to do with the fact that political news is one of the only games in town this week when it comes to potential market movers. A more plausible case could be made for last week’s jobs report causing the shift in momentum (i.e. weak wage growth casting doubt on the previously perceived pace of Fed rate hikes…(read more)

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