MBS RECAP: Bonds Sending Clear Message Ahead of Fed

Posted To: MBS Commentary

The past 3 trading sessions have largely represented a consolidation in prices and yields, just off the best levels of the year. There has certainly been a risk that rates were bouncing off those levels only to begin the next uptrend (much like mid April through mid-May), but there’s some solace to be taken in the “ceiling” behavior seen around 2.22% in 10yr yields. It’s not that 2.22% has been an unbreakable line in the sand , but it has been at the higher end of a sideways range where we’ve seen yields making more of an effort to bounce on horizontal levels. What does it all mean? Nothing too fancy, but it does confirm something we’d frequently assume before any major Fed announcement: bonds are ready to go either way. That might sound like unimportant common sense…(read more)

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