MBS RECAP: Bond Prices Defy Gravity With Help From Oil/Stocks


Posted To: MBS Commentary

We're typically talking about "the bond market in terms of 10yr Treasury yields," but in terms of PRICES , there was certainly some gravity in play coming into today. This gravity lined up with the resistance level at 2.82% in yields. In other words, the more yields fell toward 2.82%, the more resistance they'd likely experience. The first 2 hours of the trading day made it look like the bounce at 2.82% was already in. After coming close to breaking through the floor in overnight hours, bonds began the domestic session with a quick run up to 2.855%. But the late morning hours sent yields right back to the floor with a combination of heavy losses in stocks and even heavier losses in oil. In short, bond prices defied gravity . This leaves us in the strongest part of the recent…(read more)

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