Posted To: MBS Commentary
Despite Friday’s volatile move into weaker territory, recent bond market trading decisions have been surprisingly logical. Arguably, we saw Friday afternoon’s weakness because Friday morning was much stronger. In short, markets moved to the skeptical end of the spectrum regarding a Greek deal in the morning, and then simply returned to Thursday’s closing levels after the deal ended up coming together in the afternoon. As I said on Friday morning, Greece ‘folding’ was priced in. The longer they went without folding, the stronger bonds got, and when they ultimately folded, bonds snapped back to the ‘priced-in’ levels. So why are we rehashing all that? Simply put, because markets are continuing to trade this Greek bailout extension. It started looking shakier over the…(read more)
Via:: MBS MID-DAY: Slow, Logical, Positive Day for Bond Markets
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