MBS RECAP: Bonds Threaten Momentum Shift

Posted To: MBS Commentary

Today was mostly about North Korean de-escalation, and somewhat about stronger economic data. If you haven’t heard 43 times already, North Korea graciously decided to hold off on their little plan to nuke Guam (though the little plan of marching up and down the square remains intact for now). Considering that nuking Guam (or more likely, “attempting” to nuke Guam) would have led to Nuclear war or something equally unpleasant, bond markets had some gains to give back. Reason being: bonds benefited from “flight-to-safety” demand as investors shed risk amid last week’s nuclear uncertainties. All of the above being the case, most of the day’s bond losses were seen in the overnight session (the initial headlines about Guam came out last yesterday). The morning’s…(read more)

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