MBS RECAP: Bonds Manage to Hold Ground With Help From Old Friends

Posted To: MBS Commentary

Remember overseas bond markets? It would be easy to forget about the typical influence from Asian and European bond markets on US bond markets over the past few weeks, due largely to the fact that US bond markets have had bigger fish to fry. On an average day, if overseas bond markets are moving by an average amount, US bond markets will experience a lower-grade version of the same move. Pretty simple. Of course the past few weeks have seen US bond markets take their fate into their own hands as they reprice long-term inflation/growth expectations. Overseas influences are still there, but there’s no point in talking about a 2 bps of positivity from Europe if US traders are accounting for 8bps of weakness. With narrower trading ranges over the past few days, and especially with bond markets…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed