MBS Live Recap: Friendly Confluence of Events Helps Bond Markets Repair Some Damage

Last week brought the pain.  It was the worst single week for the bond market (if we count MBS) since 2013.  Although this week won't break any records, it was a refreshing change of pace, with almost every day seeing decent improvement.  

Today's gains were the best, but also the most serendipitous.  A seemingly insignificant headline about Chinese delegates cancelling a trade meeting with Montana's agricultural bureau sent shockwaves through both sides of the market.  Those headlines were flanked by newswires with market-friendly Fed speakers (Clarida and Bullard).  Finally, the 3pm CME close brought a friendly imbalance (in our favor) in tradeflows surrounding the monthly options expirations deadline.  This is the sort of thing that can help us or hurt us.  Today it helped.

Next week brings a tad more economic data but nothing too serious until the end of the week.  Still, traders will take any economic update they can get considering Powell just said the next 6 weeks of data will be critical in refining and shaping the Fed's policy path.