RMBS, CMBS improve, while Treasurys decline

The WSJ reports:

The rotation out of safe-harbor Treasury bonds was mainly driven by some optimism that an official report Friday from China may show the world's second-largest economy fared better last quarter than the 8.3% growth forecast by economists. Commercial mortgage-backed securities whose spreads have blown out this month are snapped back as traders took a rosier view of global growth and stock markets rose. The dealers are focused on commercial-real-estate collateralized-debt obligations, which are a corner of the $47 billion face amount of debt held by the New York Fed portfolio known as Maiden Lane III. They are primarily focused on dismantling the so-called CRE CDOs because the underlying commercial mortgage-backed securities are worth more as individual pieces and could likely generate more trading revenue, the investors said.

Note that the two CDOs in Maiden Lane III are the subject of a previous post.