MBS Day Ahead: Bonds Flirt With Highest Yields Since July 2015

Posted To: MBS Commentary

Bond markets begin the day still reeling from yesterday's OPEC-driven rout. We noted in yesterday's closing commentary that yields bounced on an ominous floor at at 2.35% (10yr yield). That was ominous because it has been a relevant pivot point , as seen in the chart below. The implication of a failure to break 2.35% was that we risked moving to the next higher pivot point today. Indeed, yields have been banging their heads against 2.42% since 4am this morning. While yesterday's drama was clearly a product of inflation concerns driven by the OPEC deal, today's weakness is getting more motivation from the non-inflation-related components of bond yields. This can be seen in the following chart where the the non-inflation-related components actually moved lower yesterday (blue...(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

from Mortgage News Daily http://ift.tt/2fIZebk