Posted To: MBS Commentary

The bond market took a break from the past 3 days of weakness today. There weren't any significant economic reports or news events (not as far as the market was concerned anyway), including any material changes to the coronavirus outlook. This offered a good opportunity to reflect on the nature of the coronavirus response. Simply put, traders were never expecting a dire fate for the human race as a new disease Thanos-snaps half global population. Rather, they were pricing in a very logical adjustment to global economic output based on the decreased commerce that's already been well-established. In addition to that adjustment, there's likely some measure of additional caution built into bond trading levels, and it's that caution (i.e. those drops in yields) that are most susceptible…(read more)

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Source: Mortgage News Daily