MBS RECAP: Good Mix of Good and Bad Between EU and The Fed

Posted To: MBS Commentary

Today’s trading session was certainly more interesting than yesterday’s–especially if we’re counting overnight trading hours. European bond markets led Treasuries lower overnight on news that Francois Bayrou (a previous candidate who never comes close to winning) would announce his candidacy today. This was seen as siphoning votes from one of the frontrunner (“status quo” candidate, bad for bonds) and increasing Le Pen’s (fiery populist, connotes uncertainty, good for bonds) chances. At around 10:30am, countervailing headlines hit, suggesting Bayrou would instead team up with one of the two “status quo” frontrunners. The implication here was that Le Pen had less of a chance. Markets responded accordingly with bonds instantly losing ground . The Eurodrama…(read more)

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