MBS Week Ahead: Auctions and CPI Data Vote on Bonds Next Move


Posted To: MBS Commentary

Longer-term rates have been in a bit of a holding pattern after deciding not to smash through the highest levels in more than 4 years at the end of April. Since then, the trend has been anything but conclusive with yields drifting mostly sideways and occasionally slightly stronger. This could end up being the first positive hint before a broader recovery, or it could merely be a consolidation before bonds rejoin the previous selling trend. The amount of indecision seen in bond trading since hitting those late April highs suggests both potential outcomes are still in play. We're certainly aware of the mainstream narrative pointing toward higher and higher rates due to the ongoing 'pricing-in' of increased bond issuance, decreased Fed accommodation, and risks surrounding increased…(read more)

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