MBS Day Ahead: 1 Day After Suggesting a New Pattern, Bonds Threaten to Break It


Posted To: MBS Commentary

In the day just passed, the bond market sold off in rather underwhelming fashion. There was no overt source of pessimism and the pace of movement lacked a sense of urgency. 10yr yields almost made it back into positive territory in the mid-morning hours before moving steadily higher into the afternoon. Fannie 3.0 MBS were actually positive for most of the day. In the day ahead, bonds will consider the chart-based implications of yesterday's bounce as the econ calendar builds for the week. By bouncing at slightly "higher lows" yesterday, bonds are making a case for a bigger-picture consolidation trend (lower highs and higher lows) as seen in the chart below. At least, they were yesterday! As this trading day begins, yields are already back near yesterday's lowest levels and…(read more)

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