MBS Day Ahead: Week Officially Begins With Bonds in ‘Do or Die’ Territory

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Posted To: MBS Commentary

We talked about yesterday being an unofficial 3rd day of the weekend in that trading volumes were light and the trading activity lacked conviction. Today, then, would mark the first "real" movement of the week. I even went so far as to say the trend is still unfriendly even though we saw gains yesterday. In other words, the gains were not to be trusted and we're already seeing why today. A discussed in greater detail in the first alert on MBS Live , bonds were sharply weaker overnight. The weakness makes the long-term trend look like the same long-term trend we discussed yesterday. The same issues remain with momentum metrics (the lower two sections of the chart). Shorter-term momentum is decidedly bearish (red/blue lines spiking) and longer-term momentum is decidedly shifting…(read more)

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