MBS Day Ahead: Why The First Reaction to Yellen Might Not Be Our “Final Answer”


Posted To: MBS Commentary

Welcome to another episode of Extreme Boredom: Bond Market Edition. In today's episode, bonds are pressing even further into record territory, only it's not any sort of record in terms of prices or yields. Rather, today is adding to a record-breaking absence of movement! You read that right: bonds have NEVER been flatter for longer , and you got to witness it! (Assuming you're awake…) We can quantify "the most sideways" designation for the world's benchmark interest rate (US 10yr) with something like the ADX (which we previously discussed HERE ). This technical overlay simply allows us to observe the strength of any given trend. If rates were generally moving in the same direction on most days, the little purple line (ADX) in the chart would move higher. But when…(read more)

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