MBS RECAP: Nice While It Lasted

Posted To: MBS Commentary

Yesterday's massive stock market rout was enough to coax reluctant bond yields to the lowest levels since the end of January. Given that the end of January occurred a week ago today, that gives you an idea of just how lopsided the trend has been (i.e. a seemingly epic 14bp rally only gets you back to rates from a few days ago, and at the time, those rates were the highest in several years). The video in today's MBS Live Huddle breaks down just how much movement it took in stocks to get the desired effect in bonds. The cliff notes are as follows: S&P futures fell more than 7% while 10yr futures prices (the best apples to apples comparison) rose less than 1.5%. In other words, bonds really didn't show up to rally yesterday, and it was only the buckets of cash falling out of the…(read more)

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