MBS Day Ahead: We’re Definitely Still Waiting For That New Year Momentum

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Posted To: MBS Commentary

I had my doubts at times, after some of this week's volatility. I thought perhaps that bonds were showing signs that the "new year momentum" (a noticeable bias toward higher or lower rates that tends to emerge in January as traders are free to make new, long-term, strategic bets after having their hands relatively tied at the end of December) was headed in a negative direction. But now with the week drawing to a close without any major swings, my baseline call for "waiting until at least the 2nd week of January" looks safe (barring the unforeseen in the rest of today's trading. In fact, this week has been rather narrow in the bigger picture (each day is represented by one of the 4 rightmost candlesticks in the chart below). The chart shows what a more serious attempt…(read more)

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