MBS Day Ahead: A Better Day to Glean Bonds' Underlying Intentions

Posted To: MBS Commentary

Yesterday's bond market activity suggested that traders definitely had some sort of agenda that went beyond a mere punching of the clock. Even with China being out on holiday, volumes were very high –especially for a Monday. Then there was the movement itself: one of the year's bigger rally days, taking yields very close to 2017's lower boundary. The only serviceable explanation was that traders were rushing to reset positions for a new month of trading–something that happens at the beginning of many months, but usually not so forcefully. Today, then, offers a better opportunity to see if underlying intentions go any deeper than a mere 1-day correction of month-end trading positions. In other words, we have a better chance of finding out if this rally has legs in the near-term…(read more)

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Source: Mortgage News Daily

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