MBS Day Ahead: Japan at it Again, But Here Comes US Events

Posted To: MBS Commentary

Japanese bond traders began selling right at the start of the overnight session. There wasn't a big, new monetary policy revelation, though the move began shortly after an updated list of the Bank of Japan's market operations came out. Either the BOJ didn't offer to buy as many bonds as traders expected or this is a reflection of month-end trading positions from yesterday giving way to new-month trades today. The effect on US rates is noticeable but still minimal. In other words Japanese monetary policy drama is a factor, but relative moves in related bond markets suggest it's far from the only factor. More importantly, the important US economic events and data are just getting warmed up for the week as of this morning. If Japan ever even had its hands on the wheel, domestic...(read more)

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