MBS RECAP: Limited Movement; Absent Conviction

Posted To: MBS Commentary

Bonds slightly weaker for no overt reasons Yellen speech hotly anticipated and quickly overlooked Taken together with Friday’s gains, today meant nothing The best way to think about today is that it left bond markets where they probably would have been on Friday afternoon if Traders weren’t afraid of being on the wrong side of a snowball rally. After all, it looked like a snowball rally may have been starting to take shape with yields quickly moving to the lower end of their long term range. It didn’t make much sense to bet in the other direction on Friday afternoon. But traders knew we’d have supply to deal with this week, both in terms of Treasury auctions and corporate bond issuance. As such, it made more sense from a tactical standpoint to push yields a bit higher on Friday…(read more)

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