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MBS Day Ahead: This Is The Shift. Now It's About Time and Scope

Posted To: MBS Commentary

For virtually all of 2021 (and much of Q4 2020), we've been tracking an uptrend in Treasury yields. As the overall move grew to a size rarely seen in the past few decades, we were increasingly eager to see a token correction for technical reasons (i.e. selling sprees can hibernate or straight up die of old age). The anticipation peaked with a terrible month-end in March and hopes for a better month as April started strong. So far, April has delivered on 100% of its promise to be a better month. It would only have taken 2-3 weeks of sideways-to-slightly-stronger momentum in bonds to classify the move as the corrective consolidation we were looking for. That much is a done deal. Now we can move on to asking the next series of questions about our newfound resilience. Questions: 1. How much…(read more)

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