Posted To: MBS Commentary
Last week was unpleasant for the bond market. Yields tested and then broke above the technical ceiling at 1.56%, ultimately making it as high as 1.62% before leveling off into the 3-day weekend. The new week brings new risks and new opportunities as bonds attempt to hold the line despite a condensed slate of Treasury auctions (3 and 10yr on Monday, 30yr on Tuesday). If recent ceilings hold up through the auction cycle, it would go a long way toward setting up a range ceiling. But any additional weakness would reinforce a new, upwardly sloped trend for rates. Despite a recently weaker bias, there is a small glimmer of hope in the overnight chart. It shows US bonds doing a fairly good job of holding ground despite an ongoing suggestion of additional weakness in EU bond markets (note the yellow…(read more)
