MBS MID-DAY: In Hindsight, Morning’s Big Sell-Off is Simple

By Matthew Graham

Posted To: MBS Commentary

In hindsight, this has turned out to be a simple morning for bond markets. That wasn’t the case earlier when we could only guess at the likely culprits behind a pervasive–even counterintuitive–push toward weaker levels. Then again, maybe that should have been the first clue. Pervasive, counterintuitive moves are a hallmark of the sort of tradeflow-driven momentum seen near the end and beginning of any given month. In fact, we’ve been talking about “new month” tradeflows as being a consideration as March gets underway, but with all the weakness in February, it was easier to hope or expect that the momentum would push back in a friendlier direction. As it turns out, the opposite has been true so far today. Traders had an agenda to sell from the outset and were merely waiting…(read more)

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