MBS MID-DAY: Bond Markets Happy About Stock Market Sadness

Posted To: MBS Commentary

After modest overnight gains, bonds had been pulling back in the early part of the domestic session. Treasuries and MBS were both nearly back to unchanged levels when equities markets took control of the momentum. The "stock lever" isn't always a factor for bonds, but it has been increasingly prevalent of late, and tends to be more prevalent in general amid uncertainty. And there is certainly uncertainty. Stock futures trade almost all night, but the 9:30am open of cash trading brings additional liquidity and participation from a wider variety of traders. It's not uncommon to see a more pronounced move in stocks around this time (including shortly before or after). Such was the case today as stocks began selling off after the NYSE open. This particular bout of stock market...(read more)

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