MBS Day Ahead: As Week Begins in Earnest, Bonds Are Under Pressure

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Posted To: MBS Commentary

Yesterday's recap labeled the trading day as an official 3rd day of the weekend due to an absence of volume or volatility. The underlying culprit (apart from Mondays generally being slower) was a bank holiday in the UK that contributed to a very slow start in Europe. Everyone is back in the office today, and we may soon find that the lesser of 2 evils would have been to simply lament low volume/liquidity. Reason being: as trading activity returns from its unofficial 3-day weekend, it's been increasingly challenging for bonds. The implication is that the most closely-watched technical level of the past 2 weeks–2.95% in 10yr Treasury yields–remains very much in play. 2.95% had acted as a firm floor on Friday 4/27 and it kept playing the same role during the first 3 days of last week…(read more)

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