MBS RECAP: Early Gains Nearly Erased by PM Weakness

Bonds struggled to find a theme in their first trading day back from a 3-day weekend.  Much of the international focus was on Catalonia’s quest for independence, but headlines from the region never seemed to have a material impact on bond markets–especially US bond markets.  

In fact, it was a downright slow and boring session until roughly 9:50am when some big trades started coming through the Treasury futures complex.  For bond markets, this was the highlight of the day, and there wasn’t an overt motivation anywhere to be found (though it’s not uncommon to see big trades without overt motivations shortly after key opening bells for major markets–especially on the day after a 3-day weekend).

Bonds rallied to their best levels of the day on that higher-volume trading and then began to drift slightly weaker for the next 6 hours, leaving trading levels very close to ‘unchanged‘ on the day.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/801676.aspx

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