Posted To: MBS Commentary
Remember the “QE-on vs QE-off” trading in 2013? In an extremely overt way, stocks and bonds rallied and sold together based on constantly evolving prospects for Fed tapering. It occurred perfectly between the Fed meeting that introduced tapering possibilities and the Fed meeting that confirmed it. While it hasn’t been on the same scale, we do see echoes of this same type of trading from time to time. These are especially evident when the ECB or Fed are on the near-term calendar or if an official is making a comment that seems to affect ECB/Fed accommodation prospects. That’s exactly what happened overnight tonight when ECB’s Couere said they may ‘front-load’ bond buying ahead of a less liquid summer trading season. Stocks and bonds both improved on the news, but…(read more)
Via:: MBS MID-DAY: Good, Old-Fashioned Central Bank Accommodation Trading
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