MBS MID-DAY: Biggest Rally in 2 Months. Why?

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Posted To: MBS Commentary

Bond markets are in the midst of their best day of trading since October 2nd. For perspective, that says less about how strong things are today and more about how weak the past 2 months have been. For instance, Fannie 3.5s are up a mere quarter point on the day, and only 3/8ths of a point trough to peak, but that's enough to claim the top spot. 10yr yields are down 5.4bps (almost 9 from peak to trough) and that completely obliterates anything since early October. The point is that bond markets have either been selling-off or tepidly recovering for the past 2 months and today is the first day that stands out as something new and different. Why is this happening? At first glance, this morning's ISM report looks like a culprit . It came in under 50 for the first time since late 2012--the...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/537455.aspx

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