Heading into today, we were prepared for there to be no particular rhyme or reason behind market movements. Money managers are primarily focused on housekeeping-type trading as quarterly positions are sold and reinvested without particular regard for any of the day's news or events.
Earlier this morning, the quarter-end trading was positive for bond markets. MBS and Treasuries hit their best levels the the day on 2 occasions just before and just after 10am. Momentum has been steadily weaker since then, but leaves Fannie 3.5s well above any of yesterday's trading. If that dividing line is crossed (102-26 and below), it could result in negative reprices.
Join Now or Login to Post Comments