MBS Day Ahead: Bonds At Least Entertaining a Momentum Shift

Yesterday brought moderate weakness for the bond market. Justifying it doesn't have to be any more complicated than technical resistance combined with an absence of buying demand ahead of the afternoon's 10yr Treasury auction. Yields rose enough for the auction to come in with decent stats, which helped bonds stabilize. The Fed meeting minutes fell on deaf ears for 2 reasons: they didn't say anything that couldn't already have been gleaned from the announcement, and Powell's speech from the previous day already laid out the relevant considerations for the Fed in detail. Today brings the consumer price index (already out, here's the MBS Live update ) as well as the conclusion of the week's Treasury auction cycle. CPI would have been the week's most relevant economic...(read more)

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