MBS Day Ahead: Bonds Trying to Shake Off Last Week’s Bad Vibes


Posted To: MBS Commentary

In the day just passed, a strong Retail Sales report kept the pressure on bond markets to remain in the negative trend that prevailed last week. Yields have been moving progressively higher since the June 5th jobs report catalyzed a confirmed break of a narrow, consolidation pattern at multi-year yield lows. Ultimately, however, 2.15% remained intact as a firm ceiling for the 4th straight day and bonds were able to recover a majority of the morning's losses. In the day ahead, we'll see if traders have any inclination to build on that resilience. As seen in today's chart, modest strength early in the session brings yields right in line with the lower boundary of the current negative trend (the "bad vibes" mentioned in the title). They'd need to break below 2.065 –convincingly…(read more)

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