MBS Day Ahead: Another Brexit Vote as Bonds Remain on Edge

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Posted To: MBS Commentary

Yesterday saw an extension of the recent selling trend in bonds with yields hitting the highest levels in more than a month. One might argue that yesterday was actually a breakout from the consolidation trend we've been tracking, but there are two caveats to that approach. First off, we normally like to see a bigger, more sustained break with higher volume if we're going to confirm a shift in trend. Yesterday's volume was actually fairly low. And secondly, the lines involved in charting a consolidation pattern are bit more mystical and subjective compared to the simple act of tracking trends and momentum. In other words, I could make a compelling case for adjusting almost any trend line I place on the charts, even if only slightly, but there's no subjectivity involved in saying…(read more)

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