MBS Day Ahead: Post-Election Range Threatened by Fed


Posted To: MBS Commentary

As you're likely aware, rates have been in a very well-behaved consolidation range since mid-November. The trendlines connecting the "lower highs" and "higher lows became especially linear in 2017. After challenging the lower boundary of the range last week, we've quickly moved to challenge the higher boundaries this week (plural used because there are several ways to look at the high end of the range). In terms of the diagonally-sloped line that connects the highest closing yields of the post-election period (the white line in the following chart) we've already broken through as of yesterday. From there, we can consider the line connecting the intraday highs (upper yellow line), and finally, one of several horizontal pivot points marked by the teal lines. There's…(read more)

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