MBS RECAP: Bond Weakness Looking More and More Serious

Posted To: MBS Commentary

With a 2nd day of fairly strong selling pressure in bond markets, the recent trend toward lower rates has been forcefully called into question. You can see the potential breakout from that trend in the chart below (I'll mark it up and discuss additional technical implications tomorrow morning). For today, let's recap what's up with all this weakness . First and foremost, the French election was a jumping-off point for the next phase of bond market momentum. If Macron had been shut out of the run-off election, we'd still be rallying . If Le Pen had won outright, we'd be rallying even more sharply. Because neither of those things happened, investors got the proverbial green light to get back into a " risk-on " trade. Last Friday's breaking news on this Wednesday's...(read more)

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