MBS Day Ahead: Looks Like We Made It

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Posted To: MBS Commentary

Rates staged an impressive rally in November and December before bottoming out on the first trading day of 2019. The bounce was fairly abrupt at the time and it roughly coincided with 2017's highs. It was as if the bond market was saying those days are behind us and we won't be going back any time soon. After the January 4th bounce, there was some concern that we'd zoom right back up to previous levels from the 2018 range. But support kicked in by the 18th at an interesting level (2.80%). Why interesting? Because it marked the boundary of the range that was intact for most of 2018, and remember, the bond rally that ended 2 weeks prior bounced right at the boundary for the 2017 range. Long story short , bonds were beginning to carve out a new range in no-mans-land, in between the…(read more)

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