MBS RECAP: Same Old Story: Minor Volatility and Modest Euro-Driven Gains

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In yesterday’s recap, we discussed the phenomenon whereby most of the market movement has been happening overnight during these Euro-centric times, with the US trading hours seeing comparatively less volatility.  Same old story today, but more impressive!

Bond markets managed to shrug off THREE stronger-than-expected economic reports, including a revision to GDP that took Q2 up to 4.2%.  Yet not only did that data never materialize into selling pressure, but neither did the rest of the data or stock market gains.

Fannie 3.5s traded a fairly narrow range and never dipped into negative territory.  They’re heading out an eighth of a point higher.  The scariest dip happened heading into 2pm, but bonds bounced back.  There was brief, modest reprice risk at the lows today.

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