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MBS Day Ahead: Biggest Day of Data, But Still Not What Bonds Are Waiting For

Posted To: MBS Commentary

It used to be that rate watchers and mortgage originators could simply tune in to the economic data on any given day and expect a fairly logical and commensurate result to follow in terms of bond market movement. Stronger jobs report? Rates move higher . Weaker retail sales report? Rates move lower . Fed intervention after the 2008 financial only partially changed the longstanding reaction function. It wasn't until the economic recovery entered extra innings that traders really stopped caring about how data came out versus expectations. Reason being: any big beat/miss was just one point in time and not indicative of a change in the pace of the expansion. Now we have coronavirus, and it has almost completely removed any focus on the econ data. The last time we witnessed a measurable reaction…(read more)

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