MBS RECAP: Bonds Drift Weaker as Traders Rush For Exits

Posted To: MBS Commentary

We talk a lot about participation among traders dropping off at mid-day when European markets close, but today's version turned bond markets into a veritable ghost town . Before that, yields had actually done a nice job of returning inside yesterday's trading range and under the 2.16% technical level after spiking early. I'm inclined to (mostly) disregard everything after that as serendipitous leftover trading--not indicative of the real market. Unfortunately, that won't prevent traders from selling bonds on Tuesday if that's what they're inclined to do. It simply means today, in and of itself, wasn't quite as weak as afternoon levels would suggest. Back to this "spiking early" business. What's up with that? After all, NFP was much weaker than expected...(read more)

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