Posted To: MBS Commentary
As expected, the result of the emergency EU summit overnight was a hefty brexit extension, giving the UK until 10/31 to approve a compromise deal to leave the EU. At face value, this wasn't the conclusion bonds wanted, because it keeps economic hope alive. Indeed, there's no doubt that yields would have been down sharply overnight if Britain was told "sorry, no deal... you get a hard brexit!" But what about next week and the week after? It's entirely possible that simply moving PAST the big uncertainty would have hurt bonds more than the overnight extension deal. After all the overnight extension deal only put about 2bps of upward pressure on 10yr yields, and it hurt MBS even less. At least this way bonds can benefit from the uncertainty that surrounds the October deadline...(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://bit.ly/2X5DpUu
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