MBS RECAP: Bonds Lose Enough to Wake Up Buyers. Then They Went Back to Bed

Posted To: MBS Commentary

Bonds began the day in the throes of yesterday’s ongoing momentum. There was a bit of a pause during Asian market hours, but European trading quickly pushed US rates to new 2016 highs . Unlike most of the recent selling spree, European rates actually rose more than US rates today. This ties in to one of today’s key market movers –a Reuters story on next week’s ECB announcement that was too detailed to not have some foundation in reality. The gist is not far out of line with what we’ve been worrying about for months–essentially that the ECB is indeed actively thinking of ways to break the bad news of tapering in 2017. For whatever it’s worth, most of the ECB’s alleged options include maintaining accommodation in some form (i.e. no abrupt end to QE in 2017), but for…(read more)

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