Posted To: MBS Commentary
Bond markets sold-off too far and too fast heading into last week’s jobs report. In fact, even by Thursday morning (overnight), the sell-off had reached such extreme levels of capitulation that there was not one drop left to sell. As such the biggest surge of bond-buying last week arrived not after Friday morning’s NFP, but instead in the middle of the night on Thursday. The most fascinating thing about that buying is that it occurred with no salient event to serve as motivation. The “event,” in this case, was the tradeflow exhaustion. The ominous thing about rallies that happen due to selling exhaustion is that they’re not typically built on sturdy foundations. They have more to do with a temporary lapse in pain as opposed to the determined creation of pleasure. Quite…(read more)
Via:: MBS Week Ahead: True Inflection Point Will Test Resolve of Post-Jobs Bounce
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