MBS RECAP: Potential Warning About The Range

By Matthew Graham

Posted To: MBS Commentary

I have to stretch to make a day like today interesting. As I’m fond of doing, I could easily label this one of those unofficial 3-day weekend type of Mondays. That description still works as 10yr yields were only 2bps higher and Fannie 4.0 MBS lost less than an eighth of a point. There were no significant economic reports, no major news stories, and no relevant market-moving developments. Still, if we really want to, we can glean a very small warning from the trading activity. Simply put, we’ve been tracking a consolidating range of lower highs and higher lows in bond markets. In terms of 10yr Treasury candlesticks, it would look something like the yellow lines below. As the chart suggests, today brought us a modest bounce just as Friday’s gains threatened to break below the lower…(read more)

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