MBS RECAP: One Last Day To Blame ECB For Consolidation

Posted To: MBS Commentary

Bond markets spent yet another day consolidating inside their recent range. In terms of 10yr yields that means rates have fallen from last Friday’s highs, but have also been careful to avoid breaking below the important technical floor of 1.73%. Bond markets (and markets in general) tend to consolidate for two key reasons. Either they simply need a few days to make adjustments in trading positions following a streak of higher momentum, or there’s an actual reason for indecision. In the current case, the only great candidate we have for an actual reason would be tomorrow morning’s ECB Announcement. Why is this a candidate for the “big market mover” designation? Simply put: speculation increased in September that the ECB was starting to talk about its own version of tapering…(read more)

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