MBS RECAP: Trade Progress Helps Stocks, Hurts Bonds
Posted To: MBS CommentaryIt was a straightforward trading day today. Overnight weakness came courtesy of stronger econ data in Germany and the resulting sell-off in European bonds. The rest of the weakness was a product of a ” risk-on ” move stemming from updates on US/Mexico trade relations . As with any risk-on move, stocks rallied at the expense of bonds . To bond market optimists, the weakness wasn’t too terrible considering the fairly strong surge toward new all-time highs in stocks. More cautious players may note that the bounce coincides with technical cues (overbought stochastics, as seen in the Day Ahead , as well as the recent range floor at 2.80-2.82% in 10yr yields) and the risk of more trade progress with Canada. 10yr yields ended the day up 3.25bps from Friday’s latest levels, but up…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.