MBS RECAP: Red Day but Still OK. Here’s Why


Posted To: MBS Commentary

Bonds weakened initially, but bounced back during European hours Bonds also defied rising stock prices to hold their ground Bonds also defied a ton of "issuance" to hold their ground Bonds also defied a potential shift in technicals to hold their ground And so on and so on… The moral of today's story is that it could have been a lot worse given the hurdles faced by bond markets today. There really wasn't much movement to speak of–MBS never left a measly eighth-point range–but that it is a victory in itself. The technicals have recently been looking like they were running out of steam . It wouldn't have been a surprise to see bonds push back toward the other end of their consolidative "triangle" that we discussed yesterday . It would have been even less surprising…(read more)

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