Posted To: MBS Commentary
After last Friday’s weaker jobs report, bonds rallied at first, but then bounced into weaker territory in just a few hours. That failure meant bond yields ran the risk of treating 1.53% as a technical floor. It also meant 1.62% stood a greater risk of being challenged, if not broken. Yields edged up to 1.62% yesterday and now today’s huge CPI number made it an easy call to jump significantly higher. The afternoon’s 10yr auction serves as vote on whether or not to find support at the 1.68% ceiling or proceed to the next technical level at 1.75. Those who follow along fairly closely should have eyebrows raised right now because we’ve been steadfast in our dismissal of inflation as a market mover for more than a year. But those who follow along super duper closely know that inflation…(read more)
