MBS Day Ahead: Guarding Against a Technical Bounce Before Decision Time

In the week just past, bonds were preoccupied with central bank communications. Wednesday's Fed announcement was going to be the only game in town, but Draghi's speech at the SINTRA conference (which promised rate cuts and additional easing) set a positive tone for bonds on Tuesday morning. The Fed struck a similar tone. While they didn't promise more easing, they said enough to convince markets that they would play ball with the recent shift in rate cut expectations as long as the economy warranted it. In the week ahead, we'll be counting down the days until we get to the data most likely to suggest whether or not the economy warrants Fed rate cuts! Specifically, the first week of July has been and continues to be of the utmost importance as it not only contains several of...(read more)

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