MBS MID-DAY: Bond Markets get Another Lift from Europe; Oil/Equities Much-Discussed, but Scarcely Relevant
There was a big drop in the S&P just after the noon hour, and it's being attributed to slumping energy shares or some such thing. Frankly, I haven't seen the sort of justification for such a move that I'd like to see before actually commenting on it, but that clearly hasn't stopped a few of the big media outlets. To make matters worse, some of the prevailing analysis suggests this is a factor in today's bond market strength! The interesting things are twofold:
1. Oil prices fell all night and made several sharp moves lower that produced no reaction in equities markets. Why would literally ALL of the day's equities losses come in the space of a few short minutes, well after oil prices had already leveled-off?
2. There was zero reaction in bond markets. No exaggerations here. Less than zero, perhaps.
On quite an opposite note, domestic bond markets have been exceedingly happy to react to European bond markets today, where German Bunds quickly tanked to their lowest level since December 1st. Treasuries and MBS got over and early morning misstep and have been trending into more and more positive territory ever since.
MBS | FNMA 3.0 100-21 : +0-07 | FNMA 3.5 103-29 : +0-05 | FNMA 4.0 106-21 : +0-05 |
Treasuries | 2 YR 0.6400 : -0.0033 | 10 YR 2.2780 : -0.0285 | 30 YR 2.9200 : -0.0451 |
Pricing as of 12/8/14 1:18PMEST |