MBS RECAP: Like Last Week's Sell-Off Never Even Happened

Posted To: MBS Commentary

Remember when 10yr yields spiked from roughly 2.31% to roughly 2.41% in the blink of an eye last Wednesday? That was the day before Thanksgiving, which is typically susceptible to distortions due to lower market participation. Those distortions most often take the form of a mild to moderate move that is subsequently erased–at least partially–when traders get back to business the following week. This time around, the move was far from moderate . As such, we would have been well within our right to wonder just how much we’d get back from Wednesday’s sell-off. As it happens, we got all of it –both for Treasuries and MBS. Both are now operating in the same ranges from early last week, leaving the Wed/Fri drama (red rectangle below) to look like a temporary diversion. Although MBS had…(read more)

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