MBS Week Ahead: Decision Time For The Range as Data Ramps Up

Posted To: MBS Commentary

The past 5 business days of bond market rallies brought yields right to the lower edge of 2017's range . We had been tracking these movements in terms of a "consolidation range" (i.e. converging lines connecting higher lows and lower highs) but the most recent strength makes a case for a horizontal lows. Up until Friday, 2017's two major lows were 2.305 and 2.325 in that (ascending) order. Friday brought us as low as 2.309. It also brought short-term momentum metrics into "ov e rbought" territory. While that's never a guarantee of a bounce, it does mean that bonds are more "ready" to bounce--especially in the presence of the proper motivation. Motivation this week could be easy to find, depending on the outcome of the various economic reports and the...(read more)

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