Posted To: MBS Commentary
CPI and 10yr Auction Make a Case For a Near-Term Rate Ceiling NOTE: charts look weak this morning despite strong MBS due to THE ROLL. See the 2nd half of the Day Ahead for another useful chart. Bonds started strong thanks to a weak CPI report. Actually bonds were ready to sell today, but CPI reversed the losses to the tune of roughly 3bps in 10yr yields. The 10yr Treasury auction–which might have been today’s big market mover if not for CPI–posted unobjectionable stats and bonds went on to hold the day’s gains through the 3pm close. With these events out of the way, the ability to hold in the 1.13% range is a vote in favor of a near-term ceiling at the recent highs of 1.19+. MBS underperformed, but rates nonetheless fell to their lowest levels in more than a week. Econ Data / Events…(read more)
