MBS RECAP: Bonds Take a Day to Prepare For More Directional Movement

Posted To: MBS Commentary

Quiet overnight trading session with European markets closed Economic data was mixed and left bond markets generally uninspired Treasuries and MBS gained ground early thanks to Stock/Oil losses Afternoon tradeflow considerations pushed bonds back toward weaker territory Despite US markets being fully open, today managed to take the extended holiday weekend vibe and amplify it. What is this vibe, you ask? Nothing too crazy... I'm just referencing the decreasing volumes, lighter liquidity (i.e. fewer buyers and sellers at the same price, regardless of volume), and consistent seeking-out of central technical levels. Case in point, bond markets started out in unchanged territory (in line with Thursday's weaker levels) and soon found reason to head back toward the lower end of the recent...(read more)

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