Posted To: MBS Commentary
Bonds are still in the process of trying to find a ceiling after embarking on a decisive uptrend that began in the middle of last week and accelerated after Friday’s NFP beat. In addition to Treasury auctions this week, the bond market is also digesting a very big slate of corporate bond issuance which puts upward pressure on yields, all other things being equal. We need to get through the Treasury auctions (Tue-Thu) before having a clearer sense of where the new ceiling might be. At times like this when yields/rates are in the process of moving up fairly quickly after having made it to surprisingly low levels for several weeks, it’s natural to wonder if this is the big bounce for the most recent major trend (in this case, the rally from April through July). After all, we broke above…(read more)
