Wednesday, March 2, 2016

MBS Day Ahead: Low Rate Narrative Entering Tricky Territory

Posted To: MBS Commentary

We're getting into some tricky territory with respect to market behavior and predicting the future. 2016 has been fairly unidimensional so far. Bonds rally, stocks lose ground, and even when stocks try to gain back ground, bonds still hold theirs (thanks to things like foreign central bank accommodation and the general global economic malaise). That combination of accommodation and malaise is the sort of stuff that's helped German 10yr yields do as well as they have in the following chart (red line): As you can see, and as we discussed yesterday, US 10yr yields have been caught in a bit of tug-of-war between positive and negative cues. Clearly, bonds benefited earlier in the year from panic in oil and stocks. To whatever extent oil and stocks can stage a recovery here, bond rally prospects...(read more)
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from Mortgage News Daily http://ift.tt/21CzWNQ

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