Posted To: MBS Commentary
Today is the last day of the month and quarter (or the fiscal year-end for many domestic entities or the entire nation of Japan). That makes the end of March a bit more eventfu l, historically, than the end of the other three quarters. Bond markets continue evaluating the normal set of motivations during this time, but they must now be balanced with the inherent tradeflow considerations that exist at month/quarter end. What does that mean? It sounds more complicated than it is . Imagine all the money parked and all the new money constantly being invested in mutual funds and 401k–basically anything with a general “bond market” component. The folks who manage that money can’t simply use it to buy the bond market in general (sometimes if clients are reallocating into a more aggressive…(read more)
Via:: MBS Day Ahead: Balancing Month-End Trading With Other Motivations
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