Posted To: MBS Commentary
Today could have been better, but it could have been much worse. After the big spike that followed Friday’s jobs report, bonds were on the weaker edge of their post-Brexit range. Breaking it would be “bad,” in that it would suggest a shift in momentum toward higher rates and the end of the near-all-time-low post-Brexit range. Would rates ultimately make it back to these levels even if this range breaks? I think so. But could it take weeks or months to accomplish? That’s certainly possible. And while “breaking this range” could merely be a move to the “high 3’s” for 30yr fixed rates, it sounds more palatable to not even have to find out in the first place. To that end, we live to fight another day. Treasuries were initially stronger in the overnight…(read more )