MBS Day Ahead: Unexpected Headlines Result in Bond Market “Lead-Off”

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Posted To: MBS Commentary

In the day just past, bonds did absolutely nothing new or interesting. Yields continued to trade in a narrow, sideways range–one that has persisted for more than 2 weeks. The ostensible catalyst for a breakout was (and still IS, in some ways) tomorrow's Fed announcement (and press conference and economic projections). In the day ahead, we'll ponder what it means that bonds have managed to break out more than a day before the Fed's festivities begin. In fact, today qualifies as confirmed "lead-off" move. These happen frequently enough that we've created a primer on the topic in the MBS Live knowledge base ( here it is ). Long story short, bonds know the big pitch is coming in the form of tomorrow's Fed events, but for whatever reason, they're breaking out of…(read more)

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