MBS RECAP: Stocks Liked Today's News. Yields Followed

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Posted To: MBS Commentary

The overnight session was extra quiet for bond markets, with no meaningful movements until after 8am. In hindsight, uneventful was good as the recently vague pressure on rates kicked into high gear after the FOMC Minutes. It wasn't so much the Minutes release itself. In fact, a case could easily be made for the Minutes being positive for bonds. Rather, it was the stock market reaction combined with the fact that bond markets followed the move. I won't pretend that today's weakness was ALL about stocks, because clearly, bonds were already in the process of losing ground ahead of the Fed. Rather, I would say that the abruptness of the knee-jerk trading after the Minutes was primarily a factor of a significant breakout event in equities markets. Particularly with respect to S&P...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/517955.aspx

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