Posted To: MBS CommentaryBonds/rates are in the process of defending their castle. Their way of life inside those walls could be thought of as the general maintenance of a long-term ceiling near 3.0%. On several occasions, invaders have broken the outer perimeter and attempted to overrun the castle. It was only with the help of mercenaries from Italy and Turkey that the invaders were ultimately turned away. To be clear, we’re not talking about actual mercenaries. That was a reference the Italian political drama in late May and the Turkish Lira crash in early August. Those events both blossomed just as 10yr yields were pushing over 3% and provided enough of a ” risk-off ” motivation for US yields to recover. And while the enemy isn’t necessarily at the gates to the same extent this time around, they…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.