Friday, June 29, 2018

MBS Day Ahead: Still Vetting The Big-Picture Shelf. Still Waiting For Next Move

Posted To: MBS Commentary

With each passing day this week, bonds do more to prove that the low yields achieved during the Italian panic were more than the mere byproduct of a safe-haven snowball rally. We saw intraday lows just over 2.82% on Wednesday. these line up with the intraday lows from May 31st--the first day that bonds weren't in the throes of a high-volume, high-volatility response to Italy. Although bonds would ultimately go on to lose ground in early June, much of that had to do with positioning for the big central bank announcements. Ever since then, we've been rallying again. But even if we weren't rallying... even if we were merely holding under, say, 3.0% in 10yr yields, the first half of 2018 would still look like one big sideways consolidation after more than a year of heavy selling. The...(read more)
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