MBS Day Ahead: Bonds Doubling Down on Consolidation

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Posted To: MBS Commentary

In the day just passed, bonds did their best to make it seem as if they were paying attention to various headlines and events without actually moving much at all. By midnight, yields had already unwound nearly half of Wednesday's weakness, and for no particular reason! The domestic session didn't add much to the gains, although a case could be made for political headlines providing general guidance. Still, that was more of a stock market sort of thing. At first glance, the stock market is in a similar position as bond yields. Both rose fairly quickly at the beginning of September after having fallen abruptly in August. Both have been consolidating after coming off September's highs. Here's one way to look at the consolidation in S&P futures: The lower consolidation line…(read more)

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