Posted To: MBS Commentary
Remember Max Headroom? Now there's a blast from the past. But whether you remember Max or not, his cousin Max Hedge-room made an appearance today and is the reason we can call the widely-panned 30yr bond auction the best event of the day for fixed income. Oh my! This will require some explanation… Today, and in the future, you may hear about this auction as the event that CAUSED interest rates to move higher. No… This auction was an afterthought to what the market was already doing! And what, pray tell, was the market doing? In it's standard fashion, markets have continued to "bake in" pre-data-event concessionary weakness. In other words, we're rarely seeing bonds IMPROVE leading up to auctions. Just think about how we're often noting that the ANNOUNCEMENT of…(read more)