Posted To: MBS Commentary
Decent Recovery After a Rocky Start Bonds sold off right at the start of the overnight session with yields nearly matching the recent overnight high from last Tuesday. Losses continued into the domestic session. Oil, inflation concerns, Fed rate hike expectations, technicals, and curve trading are/were all on the table as potentially contributing to the move. Case in point on “curve trading,” 30yr bond yields closed near their best levels in 3+ weeks while 5yr Treasury yields continued surging to their highest levels since before the pandemic. This reflects Fed rate hike expectations (in turn a reflection of oil/inflation concerns) and the fact that the longer-term outlook takes a hit as the shorter-term challenges increase. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market…(read more)
