Posted To: MBS Commentary
As of Monday, bonds had closed at higher yields for 8 straight days. Such streaks beg for a correction. They rarely last longer. The correction became “official” on Wednesday with a decent 10yr Treasury auction helping to confirm. But even on that same day, we warned that the gains were underwhelming at that these sorts of obvious corrections often happen in the sort of 2-day bursts seen on Tue/Wed. Sure enough, yesterday was red day for bonds and risks rapidly increased that bond sellers would be saying “game on” again. In addition to the Wayne’s World scene, the chart above shows a zoomed-in section of the prevailing uptrend (yellow parallel lines containing almost all 10yr movement since August 2020). The most basic implication of the “game on” trading is…(read more)
