Posted To: MBS Commentary
7yr Treasury auctions haven’t been great for bonds in 2021. Every time we’ve had one, bonds have sold off. In fact, the late February example proved to be one of the biggest bearish motivations for rates of the entire up-trend (stretching all the way back to August 2020). For the first time since August, today’s 7yr auction arrives amid momentum that’s been “sideways to slightly stronger” for the past few weeks. Will it make a difference? It didn’t in January. Bonds had been rallying for more than 2 weeks at the time and reversed course on the day of the 7yr auction. The following iteration caused the biggest sell-off in more than a year (an astonishing thing to consider when it comes to a market event that rarely has a big impact). So what’s the deal with…(read more)
