Thursday , 28 January 2021

MBS RECAP: Summertime Sideways

By Matthew Graham

Posted To: MBS Commentary

With the taper tantrum in 2013 and Brexit in 2016, two of our most recent examples of summertime bond trading have been pulled very far from historical trends. Namely, the summer months tend to see narrower ranges and flatter trajectories compared to other times of the year. This usually starts in June and coincides with warmer weather as well as kids getting out of school. This isn’t to say that the next 2.5-3 months are guaranteed to be sideways for bond markets. It’s just a convenient scapegoat when we’ve seen trading like today’s (which marks the 5th straight day locked inside the range set last Wednesday). Today brought the first major economic report of the week (depending on one’s definition of “major,” but it was more major than we’ve had up until now…(read more)

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