Posted To: MBS Commentary
Bonds were weaker throughout European hours (3am to 1pm) Stock prices moved significantly higher and were well-correlated with bond losses 10yr yields avoided breaking above last week’s ceiling But negative technical momentum is intact Bond markets had an off day, to be sure, and there’s a risk that it’s a bit worse than it looks . First of all, what’s redeeming about a red day? Simply put, 10yr yields held under last week’s ceiling of 1.887, only hitting 1.88 today. That might seem fairly encouraging, and it even could end up being encouraging, but it could also be deceptive. Reason being: today’s weakness keeps longer-term negative momentum intact, even though it suggests short term support. The weakness wasn’t in response to any major event either. Most of the…(read more )