MBS Day Ahead: Bonds Ponder Reversal as Month-End Approaches

Posted To: MBS Commentary

The current week begins with bonds holding ground for a 3rd day after a fairly sharp selling spree in the preceding 2 weeks. The big question is whether recent resilience marks a true shift away from that selling pressure or if it's merely a break in the unpleasant action. While this week's economic data and events MAY be able to shed SOME light on that question, I don't think they're ultimately up to the task of driving bigger-picture momentum. Additionally, while the "big question" may have to do with whether or not bonds are reversing their recent move higher in yield, the "bigger question" is whether they can merely maintain the prevailing trend in 2017 (sideways to slightly lower in rates). Today's chart speaks to both the big and bigger questions...(read more)

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