MBS RECAP: Post-GDP Rally Keeps Same Range Intact

Posted To: MBS Commentary

Overnight weakness almost ruined it, but 10yr yields just barely held inside the necessary levels to claim their third straight "inside day." In other words, the entire trading range of the past 3 days has fallen inside Tuesday's trading range. While we continue to err on the higher side of that range, today saw a modest move in the right direction after the GDP data came out. It wasn't the GDP headline that did the trick (after all, that was as-expected at +2.6 vs +2.6), but rather the inflation-related internal components as outlined in this update. Early afternoon headlines concerning a North Korean missile launch helped bonds pick up a bit more ground before they drifted sideways into the close. 10yr yields ended the day down 2.9bps at 2.29% and Fannie 3.5 MBS picked up...(read more)

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