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MBS Day Ahead: Add Australia to The List of Overseas Economies Moving Markets

Posted To: MBS Commentary

We can go years at a time without so much as a mention of Australia--at least not as it relates to the global economy. But now for the 2nd time in as many weeks, we've seen a noticeable market impact from the goings on in the merry old land of Oz (market slang for Australia because the 3 letter country code, AUS--not to be confused with automated underwriting systems in mortgage circles--sounds like "Oz"). In the overnight session, a fairly lopsided Australian inflation report came out showing prices growing at only 1.3%--much farther 'down under' than the 1.5% forecast, let alone the central bank's 2% target. It's easy to line up that inflation data with global bond markets' first rally momentum of the day in the chart below. It's similarly easy to see...(read more)