Posted To: MBS Commentary

Bonds were weaker in the overnight session as Chinese equities markets continued to bounce toward higher levels. This follows a head-fake toward lower levels last week that helped rates move back toward the lowest levels in more than 3.5 years. Follow-through from that move was responsible for Monday morning's low rates. But in general, this week has been about the market moving to price OUT the ill effects of the coronavirus panic. For whatever reason, Treasuries have done an admirable job resisting that move, but their defiance has a boundary. In other words, if Chinese equities markets and US stocks continue higher (especially if those gains are driven by coronavirus headlines), US bond yields are likely to follow more faithfully. One explanation for bond resilience may have been hiding…(read more)

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Source: Mortgage News Daily