MBS RECAP: Uneventful Start; Consolidation Continues
Posted To: MBS CommentaryAs of October 16th, we’d been tracking the most recent consolidation in bond yields (and stocks for that matter) waiting for a breakout to suggest the next dose of momentum. Stocks broke higher with conviction while bonds merely trickled sideways. Still, they’d technically broken the consolidation, thus implying more momentum toward higher rates. By the end of the following day, it showed up as 10yr yields moved back over 3.2%. That began a 2nd, bigger, broader consolidation pattern–the one we’re currently tracking (discussed in the Day Ahead ). Much like the previous pattern, the current consolidation is set to run out of room no later than Wednesday of this week. It took an exceptionally calm day today in order for bonds to remain inside the lines. If there’s an indication…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.