MBS RECAP: Bond Rout Continues With No Support From Thirty day period-Finish

Posted To: MBS Commentary

There is thirty day period-finish bond buying and then there is thirty day period-finish “placement-squaring.” These are two distinctive things. Thirty day period-finish bond-buying refers especially to the phenomenon of money managers adjusting their holdings to match a particular bond market place index. In standard, there&#039s constantly a want to add to bond holdings simply because there&#039s constantly a selected quantity that will be maturing in any specified thirty day period. That&#039s why a different title for thirty day period-finish buying is “index extensions” (simply because regular period of any specified set of bond holdings ought to be re-stretched or “prolonged” every thirty day period, lest the portfolio steadily pay out by itself down to nothing at all. Index extensions constantly convey in some bond buying near the finish of the thirty day period. Place-squaring, on the other hand, can transpire any time…(read through more)

Ahead this write-up via e mail:  Send a copy of this story to anyone you know that may perhaps want to read through it.

Leave a Reply