Posted To: MBS Commentary
GDP was super weak (0.2 vs 1.0 forecast) and all of the important internal components were weaker as well. So naturally, bond markets rallied on the news. One major problem with that rally though: it occurred inside a much larger, much more forceful sell-off. In hindsight, it’s barely detectable. “Something” pushed bond markets forcefully into weaker territory this morning and it wasn’t about to be stopped by a silly little thing like really weak GDP data. The question is what is that “something?” Whatever it is, we know it speaks German. European debt exploded this morning. It has been a complete snowball sell-a-thon for German Bunds in particular, though British ‘Gilts’ are also under noticeable pressure. US Treasuries did a fine enough job of not following…(read more)
Via:: MBS MID-DAY: Bond Markets Fear The Nudge
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