MBS Day Ahead: Auction Cycle and Technicals Keep Pressure on Bonds

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Posted To: MBS Commentary

Today brings 5yr Treasury auction = "supply pressure" Technical analysis is still negative Still, we can hope to get lucky with help from 'month-end' buying Thursday and Friday's economic data could help Bond markets may well be holding on to the recent range in 10yr yields (1.81-1.89), but they're still in a bit of a pickle. They have not managed to make any headway since last week's Fed Minutes, and in general, there is much more belief that the Fed hikes at one of the next 2 meetings whereas there was very little belief before last week. That "debate" could be one of our saving graces at the moment. As bond yields began rising last week, June was gaining the most ground as the likely target for the next hike, but comments since then have helped shift…(read more)

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