Posted To: MBS Commentary

Let's change up the old fairy tale. Bond markets have been cried wolf on a few recent occasions. In my version of the fairy tale, "crying wolf" is equivalent to saying "hey guys, there are no wolves around, so it's safe to come out and play." Anyone who listened to that wolf cry (Nov 16, 22, or 29) was promptly eaten by the wolves (i.e. rates snapped brutally higher just when it looked like they might be calming down). With the blood still on the ground from the last feasting of the wolves (yesterday's big sell-off), we're once again hearing bond markets cry wolf. This time, we have a rejection of a fairly epic long-term ceiling at 2.50% in 10yr yields as well as a rally below the next relevant ceiling of 2.42% today--all against the backdrop of a jobs report...(read more)

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