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MBS RECAP: Bonds Recover Despite Another Record Day For Stocks

Posted To: MBS Commentary

Bonds came back from their 3-day weekend in weaker territory to start the overnight session. Losses were mild at first, and then became moderate after stronger European economic data. European bonds unsurprisingly saw the bigger share of weakness, but US 10yr yields were pulled as high as 2.46% by 8:30am. It was all downhill from there. The initial catalyst for the reversal was the 9:45am Markit Manufacturing PMI data. This isn't typically a big market mover for US bond markets, but this time around the data was weak enough to carry connotations for the more highly regarded version of the data (ISM Manufacturing due out next week). The relationship is similar to the ADP Employment Report and the bigger-ticket NFP data. Bonds recaptured about half of the overnight losses at first, and then…(read more)

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Source: Mortgage News Daily

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