MBS Day Ahead: Bonds Face Technical Hurdles as Cautious Optimism Continues

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Posted To: MBS Commentary

With modest gains intact this morning (even after NFP), we're finally in a position to say that all hope may not officially be lost for bonds. That was a risk as recently as last week, when 10yr yields came incredibly close to piercing the highest levels in more than 4 years. The selling pressure cooled off on Thursday and Friday of last week, but we'd been in a holding pattern ever since then, generally struggling to sustain a break under 2.95% Even now, yields aren't looking eager to clear the various technical hurdles on the way back down. From a technical standpoint, we can't even "confirm" a break below 2.95% until we've closed well below it for 2 straight days. If you wanted to be a stickler about it, you could say that yesterday's 2.946% finish was too…(read more)

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