MBS Day Ahead: Refreshing Resilience Introduces New Possibilities

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Posted To: MBS Commentary

The day is young, but the fact that we're starting out with much of yesterday's "flash" rally intact means that new doors are opening for bonds. Next week's central bank announcements are–well… central to any assessment of near term possibilities. Because we have the Fed and ECB back-to-back, and because the Fed's announcement will include an update to the economic projections ( one of the biggest market movers we have), there's a wide range of potential outcomes. A wide range of potential outcomes tends to promote a sideways range-trade leading up to whatever it is that might cause the outcome. It was with that in mind that we began talking about a return to the 2.94-3.04% range earlier this week. But then yesterday's "flash" rally suggested there…(read more)

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