Posted To: MBS Commentary

Next week, the bond market will only be open for 3.5 days. In that time, the bond market will see a majority of its 'year-end' trades (asset allocation changes from money managers who are required to match their portfolios to the indices in their managed funds). Some of that trading will occur in the 3.5 trading days of the following trading week (half day on New Year's Eve and full closure for New Year's Day), but traders know that will be a more difficult environment in terms of liquidity. Some of it has already occurred, but it won't be until we have clarity on the stimulus/spending bill that traders can really know exactly how year-end positions might need to be adjusted. In the meantime, we're left with a few truths as far as the bond market is concerned. 0.96%…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Source: Mortgage News Daily