MBS RECAP: Bonds Continue Pushing Lower Boundary of Range

Posted To: MBS Commentary

Quiet overnight session and AM hours unfazed by sharp gains in oil prices bonds rallied into the afternoon and especially after the auction 10yr yields tagged 1.72 resistance before leveling off into close MBS gained 3 ticks Bond markets had a great day –not necessarily in terms of outright gains, but insomuch as they continued to operate near the lower boundary of their current range. In fact, 1.72% had been labeled as “max resistance” (kind of like a sub-floor below the floor) just a few days ago and 10yr yields hit 1.7210 following today’s auction. Is it ominous, then, that yields bounced right at that floor level? Maybe, but it certainly doesn’t have to be. We’ve seen plenty of examples of rates “staging” near a lower bound before they break through . Whether…(read more)

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