Monday, July 2, 2018

MBS RECAP: Strong Start; Weak Finish

Posted To: MBS Commentary

Bonds started out in stronger territory today, thanks to geopolitical risks stemming from European immigration issues. When domestic traders got in for the day, Treasuries and MBS began losing ground. Friday afternoon's closing levels were eclipsed around mid-day and bonds drifted into just slightly weaker territory by the close. The stronger ISM Manufacturing numbers were definitely a consideration for bond sellers. Up until that data came out, it wasn't abundantly clear that bonds were destined to end in the red zone. That said, the weakness was definitely intact before the data came out, and the afternoon weakness was clearly not connected to the data. All of the above suggests " new month " trading played a role. This has to do with money managers (and other traders who'd...(read more)
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