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MBS RECAP: Eerily Quiet Ahead of Central Bank Announcements

Posted To: MBS Commentary

Much has been made of tomorrow’s European Central Bank (ECB) Announcement, mainly because of its proximity to ECB President Draghi’s comments on June 27th. That’s when Draghi said deflation was being replaced by reflation and that economic growth in the Eurozone has more upside risk than downside. Those are the words of a central banker who is sending up trial balloons for tapering. Bernanke sent up similar balloons in March 2013, but they were ignored due to an abrupt shift in economic data in April (and then suddenly recalled in alarming fashion when that data was heavily revised in May). Markets are much more alert about ECB tapering risks and they’ve reckoned it’s not happening in any sort of sweeping fashion just yet. Draghi’s late June comments threw traders for…(read more)

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Source: MortgageNewsDaily

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