MBS Day Ahead: Big Directional Moves All About Keeping Things SIdeways


Posted To: MBS Commentary

Volume swelled during the first 3 days of the week, culminating in yesterday's CPI/Fed combo and a fairly large move lower in rates. That's what we can observe about the short -term. If we're looking at longer -term trends, however, yesterday's big directional move was all about keeping things sideways. The yields seen just before the CPI data were right in line with the highest since late October. The upper boundary of the consolidation trend was clearly being pushed and the rally that followed the data and the Fed clearly pushed back. As the chart suggests, this makes the sideways momentum even stronger . At this point it's bordering on uncanny. If something other than "time" or the tax bill will challenge this sideways range, it has yet to present itself. Today…(read more)

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