MBS MID-DAY: Bond Markets Battle Back, but MBS Lag. Rate Sheets Lag More.

By Matthew Graham

Posted To: MBS Commentary

For bond markets, today has largely been about holding ground and retrenching. The most relevant example came during the overnight session–just before the domestic open–when 10yr yields bounced convincingly off the 1.84 pivot point . Keep in mind that this is one of the most important long-term inflection points for domestic interest rates. Since breaking below last Wednesday, it’s seen a lot of action and most of it supportive. The resilience is also being supported by a bounce lower in equities and oil. Perhaps a better way to say this would be that equities, oil, and bond yields are moving in unison, away from risk. On an MBS-specific note, things are a little less awesome. Volatility always takes a toll on MBS’ ability to follow Treasuries to lower yields and today is no different…(read more)

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