MBS RECAP: Bonds Lose Ground For 1st Time in 6 Trading Sessions


Posted To: MBS Commentary

After 5 days of gains for longer-term bonds (we'll lump 10yr Treasuries and the MBS coupons that matter to rate sheets into that category), today finally turned red. How much to read into that weakness is a matter of debate. On one hand , it's an exceptionally slow week where we've generally seen very low volumes and a startling absence of market-moving motivations. On the other hand , 10yr yields have attempted to break below 2.30+ for 2 straight days and been unable to do so. There's something for bears and bulls in today's weakness. Bears can stay focused on that double bounce at 2.30 and worry about a turning point for the recent rally. That's not a bad strategy, but it could turn out to be a bit too jumpy given the absence of volume and motivation behind the weakness…(read more)

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