MBS RECAP: Calm Before The (Possible) Storm

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Posted To: MBS Commentary

Bonds were perfectly unchanged to start the day after the smallest amount of overnight movement we've seen all week. This is a palpable reminder that this week has indeed been all about coming to terms with the post-Fed range and preparing for what lies ahead. Specifically, ever since Fed day, 10yr yields have gradually traded in a narrower and narrower pattern without ever breaking outside the Fed day range. Domestic data and events were of little concern to bonds today. A modicum of selling pressure was seen at the 8:20am CME open. It might have even continued were it not for an exceptionally weak Chicago PMI reading at 9:45am. That ended up being the focal point of the day with yields moving quickly (though not necessarily "sharply") lower and remaining near unchanged levels…(read more)

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