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MBS RECAP: Big Bond Rally Just Got Bigger

Posted To: MBS Commentary

Big Bond Rally Just Got Bigger U.S. traders fired up the screens this morning to see a substantial bond rally and stock sell-off that happened almost exclusively during European hours. Rather than push back against the move, the domestic session took things a step farther. The motivations can be viewed as a complex mix of a pain trade for "risk-on" trading positions, technical levels, summertime seasonals, and the simple notion that it's too soon for the Fed to decide on tapering, but at the core is the fact that covid case counts are rising at their fastest pace since January. The pace of the stock sell-off added an additional source of motivation for bonds. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:32 AM Sharply stronger overnight with most…(read more)

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