MBS Day Ahead: Despite Election Drama, Europe Remains a Broader Concern

Posted To: MBS Commentary

There can be no doubt that bond markets are responding to recent political headlines. But there's even less of a doubt that stock markets are far more willing to respond. That's not much of a revelation, given that stocks tend to be more emotional and flighty when it comes to en vogue headlines. Longer-term bonds (like 10yr Treasuries and MBS) aren't only resisting election-induced volatility (as seen in stocks), but they're also resisting the messages from shorter-term bonds (like 2yr Treasuries). The latter are more likely to respond to changes in the Fed rate hike outlook. After all, the Fed Funds Rate is an overnight rate, so it will naturally correlate more with shorter-term borrowing rates. 2yr yields are telling us that markets are slightly less assured of a December...(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://ift.tt/2ffGAqD