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MBS Day Ahead: Deeper Dive on MBS vs Treasury Performance

Posted To: MBS Commentary

MBS and Treasuries do such a good job traveling together that it's especially notable when they diverge. That's doubly true on days like today where MBS have been "green" at times this morning (i.e. in positive territory) while Treasuries have been red. While this may be obvious, curious, or perhaps even interesting, it's arguably not entirely significant. There's always some ebb and flow between MBS and Treasuries. It's just usually harder to notice because it tends to happen when both sides of the market are moving in the same direction. In other words, if MBS are red, but Treasuries are "more red," MBS are still outperforming. As we discussed yesterday, the current stint of outperformance has several potential motivations: Treasuries are coping with…(read more)

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