MBS RECAP: 2nd Best Day in More Than 2 Months

Posted To: MBS Commentary

The last time trading levels in bond markets were this strong at the close of business, it was on the most dire day of the Italian political drama--the one that caused 10yr yields to drop all the way into the 2.7's . The last time before that was in the middle of April. In some ways, even though this is only the "2nd best" day since then, it's actually more of a positive indicator for bonds because we've approached it in a calmer way this time around. Case in point, a 30bp rally took 2 days when Italy was driving the gains. This time around, it's take 2 weeks to cover the same ground. Granted, there's still a bogeyman on center stage as far as financial markets are concerned. "Trade war" and other trade-related headlines are having a fairly big impact...(read more)

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