Posted To: MBS Commentary
Have you heard the one about Ferrari moving the bond market? Well, now you have. In an apparent mystery move before the start of the domestic session, stocks and bond yields dropped in unison. It wasn’t the biggest move ever, but it was abrupt enough to suggest discrete motivation. The only suspect at the scene of the crime? Ferrari earnings! What’s the takeaway? Simply put: earnings season is in full swing. Stock/bond correlation has increased, and could continue to be a factor for small-scale volatility in a week where the dominant focus remains on Friday’s jobs report. What about large-scale volatility? It depends on your definition, but if we assume the prevailing range boundaries remain intact, that conversation wouldn’t open up until yields move under 1.53 or over 1.76…(read more)
