MBS Day Ahead: Why Do Bonds Care About The Chinese Consulate in Houston?
Posted To: MBS Commentary
Remember the trade war? That was the thing that singlehandedly caused massive movement in the bond market in 2019. Trade tensions have been mounting once again, and while we're not at all likely to see the issue reprise its role as the dominant market mover of 2020, it has been causing a bit of drama in smaller doses. Take the overnight market movement for example. The only instance of decisive trading, both in terms of movement and volume, followed news of the closing of the Chinese consulate in Houston. Wait… the what now? This is a thing that matters to the bond market? The Chinese consulate? In Houston? Houston, Texas? Apparently, yes… The most obvious caveat is that this wasn't a big market movement in the bigger picture. As for why this matters at all, simply put, anything…(read more)