Posted To: MBS Commentary
Three weeks ago, the bond market made its first attempt to rally toward lower yields after ending the previous week bouncing at a ceiling of 1.75% in the 10yr. Traders were generally upbeat as they moved through the 2 and 5 year Treasury auctions, but the gains fizzled after a weak 7 year auction. That high-to-low move effectively set the sideways range that continues to hold today. Yields are almost perfectly centered in that range to begin the new week. Treasury auctions, in general, have had a bigger-than-normal impact on bonds over the past few months as they are in a position to serve as a sort of trading range litmus test. This week’s auction cycle is accelerated with both 3 and 10yr notes on tap today. Of the two, 10yr Treasuries are vastly more likely to have an impact on 10yr yields…(read more)
