MBS Day Ahead: Bonds On The Run?


Posted To: MBS Commentary

Not to be confused with a band on the run, bonds find themselves in something of a similar predicament to the namesake of McCartney's post-Beatles single. Specifically, both bonds and the band had been locked inside confined quarters, both had broken out , and both are "in trouble." In the song version, the band escapes into the night, never to be found. The market version is still playing out. The "confined quarters" in question would be the recent prevailing range in 10yr yields (2.825-2.885%), which had been intact since 6/27. Last Thursday saw a quick test of that ceiling followed by a decent rally that reinforced the range. Friday cast some doubt again as yields rose back above the 2.885% ceiling, leaving the final verdict for today's trading . The week begins…(read more)

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