MBS Day Ahead: Last Day Before Bigger Events. Bonds Hinting at a Bounce (Or Not)

Posted To: MBS Commentary

Today is the second day of this week's prologue. We're getting a sense of the market's underlying biases, but we haven't yet arrived at the bigger-ticket events (namely, tomorrow's Fed meeting, Thursday's GDP, or Friday's month-end trading day). That said, the prologue days can still be informative. They can possibly even be cause for concern depending on how today ends up. Why is that? Simply put, bonds have been rallying slowly and steadily since June 16th, and now they're showing some signs of resistance–perhaps even signs of a bounce. Of course I don't really like to use technical analysis to try to predict the future, so I'll stop well short of saying anything we've seen recently makes anything we'll see in the future more likely than anything…(read more)