MBS Day Ahead: Green Shoots? Maybe. Opportunities? You Bet!

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Posted To: MBS Commentary

One short week after hitting the worst levels in nearly 7 years there's suddenly a semblance of hope again for bonds. It was one thing to see last Friday's correction–which merely stopped the most abject bleeding–or the first 2 days of indecisive stability this week. It was another thing to see an unmistakably strong rally yesterday followed by even stronger levels today. The critical development over the past 48 hours for US bond markets has been the break below the 3.05% floor that had blocked progress since last Friday. If we wanted to be extra cautious about where we set our technical levels, we could use the previous 4-year ceiling of 3.04% and reserve judgment until bonds broke and closed below. With yields starting out the day well under 3.0%, it seems like there's not…(read more)

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