MBS Day Ahead: Rising Rate Risks Are Officially Getting Serious


Posted To: MBS Commentary

Yesterday brought a brief reprieve for bonds after the first 2 days of the week threatened to confirm a big picture shift toward higher rates (or at least to build a case for such things). But much like the brief rally in the middle of last week, yesterday's rally proved to be a head fake, only this time, it was even less convincing. In fact, it took place entirely within the confines of the weeks-long uptrend in rates (white lines in the chart). Now today, bonds started out in significantly weaker territory after overnight trade headlines rocked both sides of the market (good for stocks, bad for bonds). MBS Live subscribers can get caught up with that move HERE . The losses are already pushing the upper limit of the shorter-term trend. 1.90-1.94 is an important line in the sand for yields…(read more)

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