MBS RECAP: Eerily Calm Day; Any Meaning?

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Posted To: MBS Commentary

Today was one of those eerily calm days that we occasionally see plopped right where we'd expect to see something more exciting. And in a way, that is exciting in and of itself! Yesterday, bonds officially broke higher in yield, up and out of their recent sideways range. Rather, yesterday resoundingly confirmed that breakout, which technically began last Friday. Either way, today's baseline role was to add to the weakness. Instead, we saw modest weakness in the morning followed by enough strength to get bonds back to unchanged territory. Days like today are seen by bond bulls as evidence that the bigger picture remains positive for rates. They're seen by bond bears as a pure correction to newfound momentum. We'll only know who's right with the benefit of hindsight , but…(read more)

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