MBS RECAP: More Warning Shots From Bonds

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Posted To: MBS Commentary

Today was a more serious version of the same sort of warning shots seen at the end of last week. At that time, bond yields rose to challenge an intermediate ceiling at 2.835%, but didn't go out of their way to break it. This week began with higher yields on Monday morning, but a nice recovery throughout the day. When yesterday's gains added to that recovery, it was tempting to hit the snooze button and go back to sleep. Today's trading sounded the alarm, at least to some extent. It might not be loud enough to wake the deeper sleepers out there, but it's important to note that yields have quickly moved back up to the highest levels since before the trade war rally (Fed Day, March 21st). There weren't any big, overt motivations for the weakness. As discussed in the Huddle…(read more)

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