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MBS RECAP: Timid Treasuries Plus MBS Outperformance Suggest Caution

Posted To: MBS Commentary

Bonds Start Strong But MBS Struggle to Keep Up Last week was clearly a defensive shift for the bond market. Yields asymptotically approached 0.79% but managed to find support at that technical ceiling. As the new week gets underway, it looks like Traders may have just been waiting to buy at that supportive ceiling until after the 3-day weekend. Both Treasuries and MBS were noticeably stronger to start, but there's more ground to (re)cover if we want to get back in the previous range (sub 0.72% 10yr yield). Moreover, MBS didn't have as good of a day as Treasuries, partly due to the supply situation (discussed in video and the alert) and partly as payback for previous outperformance. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Producer Price Index…(read more)

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