Thursday, April 5, 2018

MBS RECAP: Less Volatile Version of Same Old Theme; NFP Tomorrow

Posted To: MBS Commentary

I'm running out of ways to talk about trade-war-related headlines driving risk-on vs risk-off movement in stocks and bonds. In case you've missed it, this simply refers to stock market losses heading into the end of last week in response to recent tariff announcements and the the corresponding trade war fear. As stocks approached early February's 'flash crash' lows, bonds increasingly soaked up some safe-haven demand from all the money fleeing the stock market. From there, as stocks managed to bounce and avoid setting new 2018 lows, bonds have returned to March's dominant range with 2.80% acting as a floor for 10yr Treasury yields. Today saw the same theme play out amid slightly lower volatility . This could be due to tomorrow's NFP announcement, which often motivates...(read more)
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