MBS Day Ahead: Weak Data vs J-Hole; Fed Borrowing From LO’s Bag of Carrots?

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Posted To: MBS Commentary

By Wednesday of this week, we were assessing the possibility of a positive break of the range in bonds. Yesterday, those hopes were dashed by a fairly brisk sell-off that took us right back into the previous, super narrow trading range. C'est la vie, right? Wrong, apparently. This morning's economic data was so perfectly crappy that it has quickly pushed bonds to even better levels than those seen on Wednesday, thus reigniting hopes that narrow August range is breaking in our favor. The elephant in the room, however, is the upcoming Jackson Hole symposium, culminating in Yellen's fireside chat on August 26th. It could even be such a source of indecision that is sees the relative preservation of the range for 2 more weeks. Jackson Hole will most likely have a binary outcome this…(read more)

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