MBS Day Ahead: Trading Range Fights For Survival as Big Data Hits

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Posted To: MBS Commentary

The recent downtrend is broken The slightly broader sideways range is now close to being broken Retail Sales may decide the fate of the range 10yr auction at 1pm also a potential market mover Bond markets have decidedly shifted from 'flying high' to 'under pressure.' A fairly linear downtrend had been intact since mid-March, and it was broken rather convincingly yesterday. That's not necessarily the end of the world if bond markets can manage to hold a slightly longer-term sideways trend stretching back to February. As you can see in the following chart, the sideways trend's first major line of defense is 1.80 . Not pictured in the chart is the even more important 1.84/1.85 boundary, which is where we would absolutely need to see support in the event of another big sell…(read more)

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