Wednesday, May 31, 2017

MBS Day Ahead: Hoping to Build on Recent Strength With Uncertain Month-End Boost

Posted To: MBS Commentary

In one of yesterday's updates ( THIS ONE , to be specific), we discussed the role that month-end bond buying was likely playing behind the scenes. Long story short, when we see bond market strength at the end of the month that doesn't line up well with at least one of the normally correlated markets (Yen, stocks, European bonds, and others all take turns wearing this hat), it's fair to assume that the compulsory month-end tradeflows are the key consideration. I would go so far as to say it was yesterday's driving force for bond gains, and that can raise questions about today's ability to keep the same trend alive. In the spirit of the month-end trading discussion, keep in mind that there's only a certain amount of month-end trades to be executed. If we think we saw a...(read more)
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from Mortgage News Daily http://ift.tt/2qAZISm

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