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MBS Day Ahead: Bonds Hoping Draghi Keeps Things Green

Posted To: MBS Commentary

Mario Draghi is the President of the European Central Bank (ECB). That’s the EU’s version of the Fed. Like the Fed in the past, the ECB is still adding new bond purchases to its balance sheet (the Fed tapered those new purchases beginning in Dec 2013 and markets went through the “taper tantrum” in the 6 months leading up to that). The ECB is understandably not interested in causing a European taper tantrum, but they also would like to extricate themselves from the role of world’s biggest bond buyer. On June 27th, Draghi made comments that made investors think the ECB was gearing up for taper talk. The scheduled buying program runs through December of this year (an extension of a program originally scheduled to end in March). Investors figured the ECB was at least considering…(read more)

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Source: Mortgagenewsdaily

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