The Smart Team of NOVA® Home Loans

MBS Day Ahead: Bonds Continue Following Risk Trade, Even if it Means Breaking The Range

Posted To: MBS Commentary

Yesterday, it became increasingly clear in the middle of the trading session that bond markets were responding to the "risk-off" trading motivations associated with the North Korea news. If you're not sure what "risk-off" refers to, read this primer . And if you're not up to speed on the North Korea news, read yesterday's recap . The most widely-followed indicator for risk-on/off trading is Yen/$–Japanese currency in terms of US dollars. What does Japanese currency have to do with the general concept of global investment risk? That's a great question . It doesn't have much to do with the economic or monetary policy of Japan as a country, but rather the role that Yen has grown to fill based on Japan's market interaction with the US. Currency markets…(read more)

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Source: Mortgage News Daily

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