MBS RECAP: After Some Help From Europe, Bonds Give Up

Posted To: MBS Commentary

Bonds were paralyzed during the overnight session--both in terms of outright trading levels and the yield curve. It could have been the ECB announcement, Durable Goods, or the end of the Treasury auction cycle keeping things under wraps. We didn't really know until morning trade in the US got underway. As it happened, it was the fairly uneventful post-ECB-announcement press conference with Mario Draghi that kicked off better buying in European bonds that ultimately brought Treasuries along for a mildly positive ride. As soon as the European move had run its course, however, Treasuries were left to their own devices, and those devices were red . More simply put, bonds proceeded to sell-off steadily and mechanically for the rest of the day with 10yr yields ultimately making it over 2.98%...(read more)

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