Posted To: MBS Commentary
Yesterday's bond market rally came out of left field, not just for market watchers, but for market participants as well. In fact, one of the driving forces behind the rally was the fact that bets were so universally placed on rates moving higher. When too many traders are betting on the same outcome, markets have a tendency to punish the majority. Depending whom you ask, this is a "pain trade." Yesterday's pain trade was painful for those holding short positions (bets on rates moving higher), and also short-lived. The steep decline in Treasury yields (or spike in MBS Prices) from 10am to 2pm was the extent of the drama and we're now approaching Wednesday with a more neutral stance--a little older and a little wiser for the experience. Corporate bond deals continue to throw...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
from Mortgage News Daily http://ift.tt/1mV6G1V
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