MBS Week Ahead: A Few Levels To Watch As Bonds Try To Hold Recent Gains

Posted To: MBS Commentary

Will rates be able to remain in the comparatively great territory they entered last week, or does Friday's post-NFP sell-off mean we should be fearful of a big retracement back toward levels from earlier in Dec or worse? Neither I, nor anyone else can tell you which of those options is more likely to play out, but I can suggest a few ceilings to consider in the process. There's a more optimistic ceiling just overhead around 2.68-2.69. That would be the best case scenario as these were the highs from Friday and from the overnight session. If that's broken, all hope isn't lost, but we'd be looking at a moderately big jump up to 2.81-2.82 for the next major support. In addition to trading levels themselves, we'll also be watching momentum metrics for the eventual spike...(read more)

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