MBS Day Ahead: Holiday-Shortened Week and Another Chance to Confirm Range

Posted To: MBS Commentary

Bond markets will close early this Friday and will remain fully closed next Monday for the Memorial Day holiday. 3.5-day weekends can often see a shift in trading patterns as investors account for an extra uncertainty due to an extra day and a half of untradeable weekend time. That can still be the case, to some extent, but markets are arguably already settling into a constant state of "accounting for uncertainty." In the short term, bonds have to consider the prospect of any significant shift in the coronavirus narrative. In the longer term, uncertainty surrounds the timing and nature of the economic recovery. Given that outlook, there hasn't been much of a reason to go anywhere quickly. The biggest inspirations have been related to new debt supply and the age-old custom of following…(read more)