MBS Day Ahead: Bonds May Lose Ground, And That’s OK

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Posted To: MBS Commentary

Light data day in the springtime: trading may be more about housekeeping than making any new bets on big-picture momentum Trend has been positive for bonds, suggesting "long positions" (i.e. bets on lower rates) Fridays typically see positions being squared (shorts cover and longs take profits) With Treasuries having run to key technical levels, don't sweat a bit of position squaring Ebbs and flows… It's a relatively constant theme in life and financial markets. We've often discussed the tendency for financial markets to pull back periodically simply because they've run in one direction for a certain amount of time. Bond market positivity has been flowing since the March 2016 Fed meeting, and is now reaching some important technical levels. In the following chart…(read more)

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