Posted To: MBS Commentary
Heading into the election, the dominant trading theme was "sideways to slightly weaker" for both stocks and bonds. Now, before you point to the fact that October was pretty rough for bonds (chart 1 below), let's also remember that it was only a 20bp range in 10yr yields (not that bad, historically), and that it was well-contained by a longer-term range of 0.5-0.95 that's also historically narrow. Moreover, MBS weren't nearly as weak, and mortgage rate movement vs MBS was even friendlier than MBS vs Treasuries. Cap it all off with the fact that election night didn't even see a break above .95% and suddenly the bond market might be "not quite dead yet." Rough October: But keep the context in mind: Apart from traders continuing to file back into the market post…(read more)
Source: Mortgage News Daily
