Friday, April 27, 2018

MBS RECAP: Bonds Add to Friendly Bounce

Posted To: MBS Commentary

Bonds managed to scratch out a 2nd day of "recovery" leading back from the highest yields in more than 4 years seen on Wednesday. If you don't want to read more than 3 sentences, I can tell you that it looks like yield curve trading and technical levels in the 2s/10s curve were primarily responsible for the gains. If you're in that 3 sentence crowd, see ya on Monday! For everyone else, there's this: European bond markets rallied once again in the overnight session, but this time, Treasuries didn't follow. Instead, it was only after the GDP reading that the yield curve (gap between 2 and 10yr Treasury yields) began narrowing and promoting some buying in 10's, albeit eventually. I know "curve trading" is not a very glamorous or satisfying piece of analysis...(read more)
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