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MBS Day Ahead: Bonds Confirming a Friendly Bounce, But With Lots of Help

Posted To: MBS Commentary

October has been unpleasant for the bond market–Treasuries specifically. That's not to say it's been a walk in the park for MBS. They too have lost ground consistently throughout the month, but those losses have been far better contained relative to their recent range. MBS are best characterized as "sideways" since August. Treasuries, on the other hand, were only really sideways through September. Since then, they've broken 2 key range ceilings at .72 and .80. As the chart shows, the most recent break above 0.80 is already in question. Yesterday's gain brought yields back under that technical level. Any strength today would help confirm the positive shift. So what would it take for bonds to log another win today? As always, there are several ways to answer. From a…(read more)

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