MBS Day Ahead: Lightest Day of The Week For Data and Fed Speakers


Posted To: MBS Commentary

Bond markets continue making a case for re-entry into the core of the range that has been intact since December 2016. The December Fed meeting helped set the highs of that range, and the March Fed meeting has helped to reinforce them (roughly 2.62% ). The other side of the range has come in at 2.30% on average, and definitely lacks the sort of clearly-delineated cause and effect enjoyed by the ceiling levels. In other words, when we approach the ceiling and bounce, we can clearly see the r easons behind those movements. In contrast, when yields have approached 2.30% and bounced, we don't have nearly as many convenient scapegoats. Only the most recent bounce fits that bill (where Fed comments about March rate hike potential pulled rates quickly higher at the end of February. Given that yields…(read more)

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