Article Summary
The term “bond vigilantes” has been blamed as the smoking gun for a recent bond market swoon, following an average 20-year auction. The auction was not particularly noteworthy, but it provided an opportunity for markets to sell off due to the ongoing budget battle. The stock and bond markets have been weaker as a result, with the 10-year yield increasing and MBS down by half a point.
What This Means for You
- Stay informed on the ongoing budget battle and its potential impact on the stock and bond markets.
- Consider the potential impact of increased yields on your investment strategies.
- Monitor the markets for further weakness and potential stabilization.
- Be prepared for additional volatility as the budget battle continues.
Original Post
Treasury Auction Blamed as Bond Vigilantes’ Smoking Gun
1 Hour, 44 Min ago
Vigilante justice! Taking matters into one’s own hands! It’s a sensational concept when applied to the bond market, but the term hasn’t really done us many favors over the years. It happened to work for a headline today because the term is as over-the-top as the notion that today’s 20yr auction was some magical “ah ha” moment leading to a massive reprimand of congressional budget negotiations in both stocks and bonds. In actuality, the auction was fairly average–certainly nothing that warranted the stock/bond swoon, but if markets were looking for an excuse to sell (a smoking gun?), it was one of the only options.
09:21 AM
weaker overnight amid ongoing budget battle. MBS down just over a quarter point and 10yr up 5.3bps at 4.541
01:04 PM
A bit weaker after 20yr auction. 10yr up 6.5bps at 4.553 and MBS down nearly 3/8ths.
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