MBS Day Ahead: Holiday Week Themes Still in Play

Posted To: MBS Commentary

The title of the Day Ahead commentary on Monday was " Don't Get Too Attached ." In a nutshell, the suggestion was to not get too attached to any decisive move in markets because wouldn't really be as decisive (due to lighter volume and liquidity). Today's overnight and early morning trading provide a good example of this theme in action. Whereas stocks panicked and bonds followed on Monday, the move runs the risk of happening in the opposite direction today. It doesn't really matter if these early trends continue through the rest of the day for the same reason the Christmas Eve move didn't matter. The chart above falsely suggests it was just the pre-Christmas trading environment that was serendipitous while today is somehow more "real." No... Today is...(read more)

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