MBS Day Ahead: Bonds Consider New Resistance as Week Winds Down


Posted To: MBS Commentary

In the day just passed, bonds enjoyed one of their best rally days in recent weeks as the stock market endured its 2nd weakest day since May. Stocks weren't the exclusive motivation, but there's no way to pin down cause and effect without descending into conjecture. Leading suspects include a technical bounce at 2.15% (i.e. traders sold as much as they were willing to sell after the strong jobs number 2 weeks ago), a global supply chain warning from the IMF, and a now-tabled impeachment vote in the House yesterday evening. If we had to pick 2 , however, they'd be the stock sell-off and the technical bounce in bonds. In the day ahead, we'll consider a technical bounce on the other side of this week's range. Rather than make it down to the 2.02% or 1.975% levels that were…(read more)

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