MBS Day Ahead: Apart From Speculation, All We Have Are These Technical Levels

Posted To: MBS Commentary

On a week where the calendar of events had every right to push bond yields more decisively away from their most important recent technical level (2.795% in 10yr yields), we've instead seen a narrow consolidation centered on that same indecisive technical level. There are a few moving parts to consider when attempting to anticipate the next move, but ultimately, the way yields move with respect to established technical levels will be our best source of guidance until the next big trend in 2018 makes itself clear. What do I mean by "moving parts? 1. We have to ask ourselves how much bonds have done to "price-in" various headwinds. These include the Fed's rate hike path, the increase in Treasury issuance to pay for fiscal policies, and any remaining acceleration in growth...(read more)

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