MBS Day Ahead: Bonds Running Into Same Rate Floor Ahead of Fed

By Matthew Graham

Posted To: MBS Commentary

Fed day tomorrow! We’ll finally get to see what’s what with respect to recent speculation and a factual shift in tone from several Fed members (including Powell). But we have a day and a half of trading to get through before that happens. As today’s trading ramps up, we’re seeing starkly clear confirmation of the consolidation range that I can’t stop talking about over the last week and a half. The boundaries are now clearly set at 2.92% overhead (successfully defended as a ceiling on Wed/Thu last week) and 2.82% (which has offered several floor bounces starting on December 6th). 2.82% is highlighted on the chart because that’s the boundary we’re closer to this morning. In fact, yields bounced there in the overnight session, and from a purely technical standpoint…(read more)

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