MBS RECAP: Bonds on Fire (In a Good Way)

Posted To: MBS Commentary

Bonds hit their best levels in nearly a year today, depending on the security in question. MBS are lagging behind Treasuries for reasons discussed in the Day Ahead post (which you should save and refer to if you've been curious about MBS vs Treasury performance). The face-melting rally wasn't destined to happen based on the overnight or early morning trading. In fact, bonds were slightly weaker in the morning hours and didn't read much into stock losses between 9:30 and 9:55am. Then the ISM report happened. ISM Manufacturing is one of only a few top tier economic reports in terms of market movement potential and consistency. Granted, it's no NFP--nothing is--but it's as close as any other report gets. It completely tanked today, with the worst month-over-month loss since...(read more)

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