Wednesday, April 25, 2018

MBS RECAP: Selling Spree Continues

Posted To: MBS Commentary

The recent rate drama continues unabated. Today was the 6th day of heavy selling in bond markets, bringing yields within striking distance of the 2014 highs near 3.041%. As has been the case during this sell-off, there really hasn't been much to hang one's hat on with respect to convenient explanations. It's not as if there was some big revelation from a major central bank or some hugely positive piece of economic data. Rather, I continue to see this as a simple resumption of the previous bigger-picture trend toward higher rates, with the same old broad headwinds accepting blame (Fed outlook, Treasury issuance outlook, growth/inflation risks). This past week was compounded not only by a technical break of March's corrective trend, but also by distorted tradeflows associated...(read more)
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