Posted To: MBS Commentary
All of today’s drama–if you can call it that–came in the form of curve trading. That refers to traders adjusting bond market holdings by selling one part of the yield curve to buy another. In today’s case, the shorter maturities were sold and longer maturities were bought. This so-called curve flattening is consistent with several of the key inputs we had today. The first input was the Core CPI (consumer price index, an inflation measure) reading, which came in right in line with expectations at +0.2. Treasuries generally weakened on this data across the curve, but 2 and 3yr Notes weakened the most as they would be more affected by changes in Fed rate hike timing. The second input was the ongoing rate-lock unwinds after a big week of corporate bond issuance. Corporations sell Treasuries…(read more)
Via:: MBS RECAP: Big Move in Yield Curve; MBS Unchanged
Share this article
