MBS Day Ahead: Too Soon to Hope For Support?
Posted To: MBS Commentary
This week began with a decisive breakout to higher yields in the bond market. Trump's comments on stimulus have been a key source of volatility although the Treasury auction process proved to be a relevant consideration yesterday (in fact, the auction marked the beginning of the sell-off in the afternoon). Today begins with bonds trading in a relatively calm pattern with lighter volume and yields remaining under .79% (the technical ceiling we began tracking when it offered a bounce in late August). All of the above is more impressive or at least potentially significant as it occurred in spite of upbeat Trump comments on fiscal stimulus earlier this morning. With all of the above in mind, it's fair to wonder if we have a chance to see a more supportive tone in bonds. 0.79% has generally…(read more)