MBS Day Ahead: Bond Markets May Be Done For The Holidays

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Posted To: MBS Commentary

Take a few steps back from the shorter-term charts (we tend to watch at 2-day chart for most lock/float purposes on MBS Live ) and a theme begins to emerge about bond market momentum over the past 2 months. There has been additional reinforcement of that them so far this week as Tuesday's high yields and Wednesday's low yields hit the same trendlines that began to suggest a holiday consolidation. What's a holiday consolidation? Quite simply, warm bodies start disappearing from trade desks (and of course, from Capitol Hill) this time of year. There's one major wave around Thanksgiving, then after a few weeks of work, a much bigger exodus for the Christmas/New Year holidays. When traders start tuning out, it's not uncommon to see trendlines emerge on charts like bowling bumpers…(read more)

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