MBS RECAP: Bonds Erase Yesterday's Weakness Without Much Help

Posted To: MBS Commentary

Today had no significant news or events on the calendar, thus leaving traders to watch other traders for cues. To some extent, several Fed speakers got some attention, but the best we can do here is to pick out only the comments that reinforce the rally and tell you about those. And that doesn’t seem very fair, considering the there were Fed comments that argued for bond market weakness. Treasuries improved modestly overnight with help from Europe (friendly comments from Bank of England president and weak inflation in Germany). The spillover was minimal , however. Gains improved during domestic hours when US traders and European traders were active at the same time. After Europe was out of the day, so were bond market gains. Yes, it really looks that simple: slight strength in Europe +…(read more)

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