MBS Day Ahead: World of Pain For MBS; More Past Precedent For Treasury Volatility

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Posted To: MBS Commentary

Another day, another false start confirmed for the stock market. More specifically, the modest bounce in stocks that was intact on Tuesday afternoon has been erased. Overnight trading brought averages even lower with a circuit breaker stopping the action just after 8am ET. S&P futures are now in the mid 2500's after being above 2800 early yesterday morning. For Treasuries, this week's bounce hasn't been quite as easy to erase, but at the very least, it seems to be finding a ceiling. If these volatile back-and-forth trading days are like the past examples that follow a massive rally, we could be settling in for significant volatility inside a well-defined range. It's too soon to tell if it would be a sideways/consolidating range, or a sloped "trend channel," but…(read more)

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