MBS Week Ahead: Getting Closer and Closer to Big-Picture Decisions

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Posted To: MBS Commentary

Bonds have stayed strong, despite apparent headwinds Technicals suggest we're due for a bounce Such a bounce could still be part of a broader, positive theme We could be waiting a while to find out if it's negative Welcome to the 3rd week of May. Bond markets are faced with a fairly tough decision . They'll either have to begin the process of 'correcting' toward higher yields, or they'll have to break some fairly serious lines in the sand. The lines in question have to do with the "consolidation" trends we've been tracking in 2016. There is a short and a long term version seen in the chart below. As the chart shows, the cadence of the short term (upper) portion of the chart suggests we're at some risk of bouncing higher in the short term. Until proven…(read more)

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