MBS Day Ahead: Markets Look to Powell to Confirm (or Reject) Outlook

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Posted To: MBS Commentary

In the day just passed, bonds weakened slightly but remained inside the recent range. The weakness is in line with a linear trend leading to the upper end of the range following Friday's strong jobs report. We can assume that the willingness to remain range-bound reflects the uncertainty surrounding today's key events. In the day ahead, the market's attention will be squarely focused on Powell's congressional testimony which begins at 10am ET. He'll be reading prepared remarks that have already been released and proven to be a big source of gains for bonds earlier this morning. Whereas yields were pushing up and out of the recent range overnight, the Powell speech easily brought them back in line. It could be the case that traders already have what they wanted from Powell…(read more)

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