Thursday , 21 January 2021

MBS Day Ahead: From Pain Trade to Pain Trade

By Matthew Graham

Posted To: MBS Commentary

The US version of 2015’s massive bond market movement doesn’t make for very riveting analysis. It’s not the sort of thing that will be very satisfying–neither for you to hear, nor to explain to others. In fact, it could even be a bit anticlimactic and, at worst, open to skepticism. But none of that makes it any less true. It’s largely a story of trading positions . Positional considerations are a relatively constant theme in our discussions, and early 2015 is not exception. Every time we talk about a snowball move, we’re talking about the positional dominoes that can not only exacerbate moves, but even take on a lives of their own. After listing the positional considerations as a key ingredient in yesterday’s sell-off, I’ve been happy to see more and more confirmation…(read more)

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