Saturday , 23 January 2021

MBS Day Ahead: Bond Markets Still Trying to Make up Mind After ECB

By Matthew Graham

Posted To: MBS Commentary

So much of 2014 was spent building up to the notion of ECB QE and so much of the first 2 weeks of 2015 was dedicated to fully pricing it in that bond markets seem like they’re not sure what to do next. Either that or the reality of ECB QE is still being digested in the context of January’s month-end trading needs and we’re about to get another mega-dose of volatility next week. Either way, 10yr yields have arguably been dead sideways ever since QE became a reality on January 15th. Thankfully, the sideways range has given us clear technical levels to serve as fence posts. The lowest fence post at 1.70 was only visited for the second time yesterday after the FOMC Announcement. It’s anyone’s guess as to the motivation ( discussed in more detail HERE ), but if it’s broken…(read more)

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