MBS RECAP: Bonds Make Good on Threats of Weakness

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Posted To: MBS Commentary

Bonds have been threatening to end their pleasantly surprising stint of gains over the past few weeks on each of the past 4 business days. Yesterday's weakness was technically enough to start packing up the party supplies, but an isolated day of trend breakage is always more meaningful when it brings a friend. Today was the friend–only in our case, it's the friend of an enemy . In other words, today's moderate bond market weakness confirms the breakout of the stronger trend that had been intact during the previous 2 weeks. The losses can't be traced to any singular event although we can see that most of the weakness occurred during European hours overnight. News of a potential Brexit re-vote added to the mid-day weakness and actually prompted bond yields to hit their highs…(read more)

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