MBS RECAP: Frustrating Sell-Off for Bond Markets. Blame Canada?

By Matthew Graham

Posted To: MBS Commentary

This may be the first time in the history of the MBS Commentary that Canada has made an appearance as a relevant market mover–let alone a headline appearance. It wasn’t until I saw the chart below that I really believed what I was reading and seeing. It shows 10yr Treasury yields in yellow and the yield curve in green (I used 10yr vs 3yr yields because 3’s move more than 2’s, but both speak to what’s going on in the short end of the curve). For those who’d appreciate the refresher , when we’re talking about “the curve,” it’s really just a fancy way of talking about how close together are longer term and shorter term yields. A lot of Treasury trading is done on a curve basis as opposed to outright. In other words, a trader would bet on 10’s falling…(read more)

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