MBS RECAP: Bonds Stay on the Ropes Ahead of European Meetings and Auctions

By Matthew Graham

Posted To: MBS Commentary

Bond markets got the 3yr Treasury auction out of the way today. While it was noticeably positive for Treasuries, it was the least potent of the 3 in terms of market movement potential. 10’s and 30’s are yet to come in the next two days. Along with big corporate bond issuance, this available supply is part of the rationale for the current level of hesitation in bonds, but probably not the biggest part. There’s a two way race for the biggest contributor to that hesitation. It’s between Europe and the technical realities of the recent rally. Those realities are quite simply refer to trading levels having become overheated in January, relative to the pace set during 2014. In other words, rates fell quickly and could simply be moderating. The European considerations include the upcoming…(read more)

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