MBS Day Ahead: Looking For a Pre-NFP Lead-Off After Yellen?

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Posted To: MBS Commentary

On these NFP weeks, one of the concepts we routinely discuss is that of the " pre-NFP lead-off. " Just to make sure we're on the same page, the "lead-off" is a metaphor from the world of baseball where a player who is on base will take a few side-steps toward the next base before the next pitch is thrown. The only difference for bond markets is that the proverbial "next base" can either represent higher or lower yields. When it comes to "the base" that bond markets are currently occupying, this is typically some sort of central pivot point or range boundary . Coming in to NFP week, we'll see yields begin to gravitate toward, or bounce on that technical level. In the current case, that is arguably the middle bollinger band (a 21-day exponential…(read more)

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