MBS RECAP: Calmer Day, But It Still Confirms a Weaker Trend

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Posted To: MBS Commentary

Today was much calmer than yesterday in terms of intraday volatility. The overall trading ranges in 10yr yields and MBS were more than twice as narrow. But in each case, those ranges occurred almost completely outside yesterday's ranges… on the unfriendly side. In other words, compared to yesterday's 2.39-2.47 range in 10yr yields, today's was 2.44-2.50 (through the 3pm close). The takeaway is that yesterday's break outside the consolidative trend we've been following for months is "confirmed" from a technical analysis standpoint. Momentum indicators are in agreement, and lender rate sheets are in the worst shape in months. The only caveat is that late December can see trading occur in its own vacuum, ultimately with little bearing on momentum in the following…(read more)

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