MBS Day Ahead: Bonds Sending Same Old Warning

Posted To: MBS Commentary

August began with bonds pushing several positive boundaries. 10yr yields had just broken a technical floor at .57//58 and 2.0 UMBS were enjoying a surge of momentum after weeks of resistance around a price of 103. To hear MBS tell the story, that positive momentum may have leveled off, but things are still going well for bonds. The closest they came to revisiting the 103 level was on Friday and they were still nearly a half point higher at the time. Treasuries, on the other hand, are telling a different story as yields were as high as .5788% in early morning trading hours. Before that, they'd take the entirety of last week to begin sending a warning. At best, yields were struggling to move into the 0.4-0.5% range. At worst, we were seeing the early phases of a bigger-picture reversal of…(read more)