MBS RECAP: Bonds Build Case for Support After Yellen

Posted To: MBS Commentary

” Support ” and ” resistance ” are two terms often thrown around in market analysis. They loosely refer to ceilings and floors respectively (as far as rates are concerned), but it’s slightly more complicated than that (as covered in our primer on MBS Live ). The gist is that ceilings and floors can still be broken, but they represent levels where rates have been more likely to bounce vs break through. With the past 2 days of sideways apathy, the 2.42% ceiling in 10yr yields was getting some potential affirmation . We needed to see how markets would move once the week’s bigger-ticket events came out. Investors were waiting for Yellen’s semi-annual congressional testimony for an indication that her tone had shifted in a similar fashion as several of her Fed colleagues…(read more)

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