MBS Day Ahead: Taking Cues From “The Range” Implies Weakness Today

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Posted To: MBS Commentary

Yesterday's recap signed off with the following thought: "no data on tap for tomorrow [in reference to today], the trading range should be as good a guide as anything. With that in mind, rates are slightly closer to the lower end of their consolidative range." The day has scarcely begun and we're already seeing a move back to the other side of the range. Fortunately, the range continues to be exceptionally narrow and overall momentum continues to be exceptionally flat. This weakness is merely a low-volume, low-liquidity example of equal and opposite reactions reigning supreme when bonds are stuck in a range. If you forced me to take a stand on what's about to happen, I would honestly tell you that it's up to the Fed. Markets look truly ready to head either way to a…(read more)

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