MBS RECAP: Weakest Levels in Nearly 5 Months

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Posted To: MBS Commentary

Traders who reported seeing buying signals as 10yr yields approached 1.80 earlier this week would surely like to borrow a time machine . In retrospect, 1.80% turns out to have been a sell signal, and a loud one at that. In defense of those traders, and indeed of the entire notion of upper range boundaries logically serving as buy signals for range-bound markets, their logic was sound until today's European session. Particularly, UK GDP not only remained positive in the post-Brexit 3rd quarter, but it nearly doubled its median forecast. Brexit schmexit! Granted, it's far too soon to declare Brexit a non-event (especially because it hasn't even officially happened), but the GDP results nonetheless rejected the notion of the post-apocalyptic dystopia that had fueled so much Brexit…(read more)

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