MBS Day Ahead: Bonds Attempt to Capitalize on Post-Fed Momentum


Posted To: MBS Commentary

The day begins with bond markets holding yesterday's post-Fed rally, and adding to the gains overnight. In fact, we've seen enough of an improvement that we may be in a position to consider an official end to the negative momentum intact since mid-February. Such a glorious occasion would take more than 24 hours of positive performance, but the point is that the process has begun, and can continue as long as a few key technicals are maintained. These are fairly easy to observe in the following chart. The top section has the ubiquitous Bollinger Bands. With the overnight trading momentum, 10yr yields are now breaking through the middle band. Holding below for the rest of the day would be a technical victory (with the word "technical" here meaning "in terms of technical…(read more)

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