MBS Week Ahead: Burden on Bonds to Prove Rates Aren't Rising

Posted To: MBS Commentary

As October begins, bond markets are pretty close to trading levels seen at the end of August--close enough to call September a "flat month" anyway. But that's only if we're looking at where things began and ended. Between then and now, there has been plenty of volatility, relatively speaking. After holding inside a very narrow 1.52-1.62 range for most of August, 10yr yields vaulted to 1.75 in just a few days during the middle of September. That forced us to consider the possibility that rates were confirming a broader uptrend that began with the bounce off all-time lows in early July. Unfortunately, we'll have to continue having that conversation unless bonds can gain enough ground to break below one of several technical levels seen in the following chart. First thing's...(read more)

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