Posted To: MBS Commentary
Yesterday’s closing commentary, entitled “Stronger Case For Stability But Not Complacency” acknowledged the reassuringly sideways vibe offered by the first 4 days of this week’s trading but warned “without some fundamental shock to the economy or covid outlook, we won’t be surprised if this rally has a tough time making huge progress toward lower rates.” That’s pretty vague, but the overnight trading action has offered clarity . Rather than the general notion of a “tough time making huge progress,” we can now observe a blatant unwillingness on the part of 10yr yields to break below 1.62%. This strongly reinforces the other comments from yesterday’s recap, which said the recent strength is best thought of as a sideways consolidation, and that…(read more)
