MBS Day Ahead: Trend Remains Unfriendly, But MBS Outperform

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Posted To: MBS Commentary

Last week provided some hope for bond markets due to a relatively strong move off the recent highs. 10yr yields recovered from the previous week's 1.80% closing level to 1.73% a week later. Granted, that's not a huge move, nor is it a great outright level relative to the past 4 months, but it was a step in the right direction . Unfortunately, such steps are often seen during longer-term uptrends. We would have liked to have seen a solid break below the 1.73% pivot point (a "pivot" because it recently acted as a firm "ceiling" and is now building a strong resume as "floor"). Even then, breaking below 1.73% would only be the first step in defeating the broader trend. Yields are also trading above the 25, 50, 100, and 200 day moving averages. Though these…(read more)

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