Posted To: MBS Commentary
Whether it’s an imperfect catch-all term like “tradeflows,” or a similarly imprecise reference to the “unseen hand,” bonds often find motivation from factors that defy and transcend the market movers relied upon by the average rate watcher. A much weaker economic report or friendlier-than-expected Fed communication… These are the sorts of conventional market movers that are well understood. On the other side of the spectrum, there are things like short squeezes, technical triggers, curve trades, real money accounts scrambling to lock in yields before they move any lower, and many other trading motivations that don’t make themselves readily apparent on anything other than a forensic level. Read this post from a few weeks ago for an example of the last time we explored…(read more)
