MBS Day Ahead: November Begins Poorly For Bonds. Any Hope?

Posted To: MBS Commentary

The Summer months sure were great for bond markets, weren't they? Massive rally in June, all-time low yields in July, and reasonable stability just off all-time lows in August. But things have been unpleasant since then--not just in terms of weakness, but also due to volatility. Day to day moves have been bigger and seemingly more random. After failing to break back below the mid 1.5's at the end of September, 10yr yields took October as an opportunity for a fairly quick spike 30bps higher in yield. Key motivations include increased fears that the ECB will taper its bond buying program, increased certainty of a December Fed hike, and decreased market anxiety over Brexit fallout (due to decent data in the UK). All of the above has yields on the upper edge of a longer term trend channel...(read more)

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