MBS Day Ahead: On Guard Against Early 2018 Momentum

Posted To: MBS Commentary

If you happen to read and retain most of what I write, you’ll have noticed that toward the end of December, I increasingly mentioned that it wouldn’t be until the first full week in January (which is NEXT week) that we’d be more likely to see the first major move in bond market momentum for the year. My friends at BMO Capital Markets went a step further in a client note yesterday, saying we’re ” still effectively in holiday trading mode, and will be for a couple more weeks.” Whether it’s next week or a few weeks from now, it’s only a matter of time before we see what’s on traders’ minds for the start of 2018. Either way, we will almost certainly see a choosing of teams, and a clear, sustained move higher or lower. The first few days of trading have…(read more)

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