MBS Day Ahead: Still In The Range, But Defensive Trend Continues

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Posted To: MBS Commentary

While there have been a few pockets of decent gains in the past week (Thursday afternoon and yesterday morning), the general trend has been toward weaker levels since last Wednesday. That marked the 2nd time in March that 10yr yields bounced at 2.80% in a clearly-delineated sort of way. Each bounce has given way to fairly linear selling trends (i.e. rates moving higher). Yields are currently riding that trend into tomorrow's FOMC announcement. There are several pivot points (or "technical levels") in 10yr yields that serve as a backdrop for the recent breakout attempts and subsequent trends. Naturally, with the 2 big bounces both happening at 2.80%, that's an obvious choice for the bottom of the recent range. The high end is a bit more subjective, but 2.91% is a good first…(read more)

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