MBS RECAP: Exceptionally Quiet Day; More of a "Pass"

In the magical sharing circle that is global financial markets, the "talking stick" was passed to bonds, as it is every day.  But rather than share a magical story, bonds simply said "pass."  And that's about as riveting as any honest assessment of today's trading can be.

For those who are into looking at market movement under a microscope, there are a few other points to cover.  First of all, we had Japan coming back to work today after yesterday's Marine Day holiday.  Word on the street is that Japan was an active buyer of Treasuries in the early overnight session--relative to everyone else who didn't have the day off yesterday.  This amounted to a modest bump to start the day and from there, weakness in other markets (like stocks and oil) helped drive some safe haven demand.  Again, all of this played out on a small scale, but you're the one who chose to look through the microscope, after all!  

Slightly less microscopic was the impact from algorithmic trading (smart computer programs that read twitter, among other things, affectionately referred to as "algos").  Algos took note of a tweet-storm regarding an "explosion" and "fire" in the "Turkish Capitol"--words that might logically be associated with the need to buy bonds and sell stocks.  With bonds holding gains despite drama subsiding, I would normally say there must have been something else going on here, but if not for the surge in volume created by those headlines, today would have been one of the quietest of the year.  All that to say, this sort of headline would normally be traded back out of the market, but there weren't enough warm bodies to do it today.