Posted To: MBS Commentary

Heading into today, we expected the bond market to ignore potentially stronger Retail Sales data. Not only did bonds overlook the big beat (9.8 vs 5.9 f’cast), but they actually rallied in response. This was made all the more remarkable by the presence of 3 other better-than-expected economic reports that came out at the same time. So what’s driving the gains? That’s a long story, including technicals, corporate bonds, overseas tradeflows, and the general front-running of post-covid Treasury range. As far as overseas flows are concerned, much has been made of Japan’s heavy participation in US debt. While the participation is nothing new, the narrative of “heavy selling” in March was quite prevalent in certain circles. The theory was that Japanese investors were drastically…(read more)

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Published On: April 15, 2021 / Categories: Mortgage News /

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