Posted To: MBS Commentary
Yesterday saw yields hold at just slightly lower highs on an intraday basis, thus offering a glimmer of hope for a bond bounce. We discussed the risk that this was a trap, and so far today, it looks like it was. 10yr yields are over 1.4% and UMBS 2.5 coupons are now the only game in town. Where is that giant squid guy from Star Wars when you need him? The bond market weakness is sharper and more relentless than many market watchers anticipated. One common topic of conversation among those hoping for a bounce is the interplay between stocks and bonds. Late 2018 is fresh in our minds with widespread belief that "high rates" precipitated a stock sell-off which, in turn, helped rates move lower. I won't say "that's not what happened," because that dynamic was in play…(read more)
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