MBS Day Ahead: Most Relevant Economic Data of The Week

Posted To: MBS Commentary

So far this week, economic data has played a subdued, almost meaningless role in motivating bond market movement. Instead, we've seen big picture themes take control as the "risk on" trade (higher stocks and bond yields) returned from its holiday break. While so much of the focus has been on Trump, the dark horse is arguably Yellen and/or the Fed. It was the December Fed announcement that prompted the final " blow-off top " in yields in December. This served as the cue for the lower volume and lighter liquidity of the holiday season to begin. Bonds then began to recover as traders capitalized on the lull in momentum. Some booked profits from the short positions taken out post-election. Others took advantage of the tactical opportunity (everyone had been waiting for the...(read more)

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