Posted To: MBS Commentary
Markets have been doing a good job of reacting to economic data so far this week. That was a good thing again this morning as the data was weaker in general. Bonds reacted accordingly and moved back toward yesterday’s best levels . Unfortunately, they never broke through yesterday’s best levels. While the trend of logical reactions to economic data should generally continue, it’s not the only motivation . Yesterday’s dip in Treasury yields served as an enticement for corporations to issue debt. This creates upward pressure for rates in several ways, not the least of which being that there is more supply of debt for Treasuries and Mortgage-Backed Securities to contend with. Increased supply increases competition in the broader bond market, which hurts Treasuries and MBS. That…(read more)
Via:: MBS RECAP: Fading Back to Unchanged After Stronger Start
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