More due to timing and coincidence than anything, we got a few negative reprices this afternoon. Shortly thereafter, prices moved right back mid-point of today's trading range and never left. That said, things were a bit weaker in Treasuries.
A small amount of weakness was intact after the overnight session, but bonds were able to move into positive territory just after 10am. The most helpful factor was a stock market sell-off at the same time. It would then prove to be unhelpful into the afternoon as Treasury yields moved higher with stocks.
MBS are simply one step removed from that 'stock lever' movement, and thus lost less ground. The incremental weakness in Treasuries could also have to do with the week's upcoming auction supply.
Join Now or Login to Post Comments