MBS Day Ahead: Is There a Common Theme For Bonds at Year-End?

Posted To: MBS Commentary

From time to time, a discussion will start up among MBS Live community members regarding certain habits for certain months of the year. Some popular observations have been "bonds always sell-off in October" and "there's always volatility in March." Of course nothing in financial markets will ever "always" do the same thing (because anything that can be known with certainty is already priced in to current trading levels), but some general trends do seem to emerge more often than others. Whether or not this is mere coincidence is hard to say. We can almost always identify underlying reasons for the movement seen. Still, for the past several years, and indeed in more than half the cases since the Financial Crisis, bonds have done something substantially similar…(read more)

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