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MBS RECAP: Shutdown Deal Hurts Bonds, But Mostly Helped Stocks

Posted To: MBS Commentary

It's hard to say exactly where stocks and bonds would be today absent the news from yesterday night regarding a possible shutdown deal. Both sides of the market were already in the process of bouncing as of last Friday--with yesterday's closing levels acting to extend that move. The shutdown news didn't hut until after the close. It definitely had an impact, but it's impossible to say that trading levels would be very different without it. In fact, bonds lost ground at a slower pace today compared to yesterday, so at the very least, we can conclude that bonds aren't hung up about it. The last remaining unknown with respect to this shutdown saga is what, if any, reaction we'll see when the deal is finalized. There too, it's safe to say it's not going to be a defining...(read more)