MBS Day Ahead: We’re Supposed to Have a Tough Time


Posted To: MBS Commentary

Both yesterday and the day before, bonds closed in stronger territory than the previous day's close. That's the first time that's happened since early November, and one of the few times it's happened in several months. The other occurrences in that time frame all acted as mere corrections in a broader move toward higher rates (the move that brought us into the current sideways range). Yesterday's gains also brought yields to the lower end of the consolidative range seen in today's chart inside the teal lines. If the range is the range, then we're supposed to have a tough time making any additional gains today. If, on the other hand, we DO manage to make decent gains, it could be a sign about latent bond buying demand. In order to get very excited about that, we'd…(read more)

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