MBS Day Ahead: 2 Charts That Help Explain the Big Picture

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Posted To: MBS Commentary

There's nothing significant on the econ calendar today, and bonds are starting out by retreating (in a good way) back into the center of the ongoing uptrend. On days like today, bond analysis has to look to the bigger picture (because there's not much to say about today). If you didn't catch the last big-picture explanation on why things are the way they are, the best recent example is probably THIS ONE about short-term rates driving long term rates. I revisited that topic in yesterday's Day Ahead to some extent ( here ) as well. Today's first chart speaks to the same sort of phenomenon whereby the shorter end of the yield curve is pushing longer-term rates reluctantly higher. I say "reluctantly" because long term rates really want to see more evidence of rising…(read more)

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