MBS Day Ahead: No Data, and Maybe Even No Drama

Posted To: MBS Commentary

Bond markets have been surprisingly calm this week, given what's at stake. 3 weeks ago, we were faced with the new prospect of the European Central Bank potentially lifting its foot off the accelerator of quantitative easing, the new prospect of Japan changing up its stimulus framework, and the prospect of the Fed finally having a green light to hike rates (the true green light comes not from the economy, but rather from other central banks looking less aggressive in their easing efforts, though the Fed won't directly admit this). While it is true that the past few days have shaken things up in a good way for bond markets, they haven't been enough to fundamentally alter our relationship to recent trends. That have taken the first step in that regard, but not a big enough step to...(read more)

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