MBS Day Ahead: New Week, New Chance To Find The Next Ceiling

0.96% was a well-established ceiling for 10yr yields in November and December. Despite numerous intraday breaks, yields only managed to close higher on Dec 4th (.969%). Every time yields moved up into the .96% zone, buyers pushed back like clockwork , even if only on a wristwatch scale. Fast forward to last week and the ceiling was obliterated by the GA senate election results (full democratic control implies more Treasury issuance in short term). The week ended with 3 heavy days of selling--heavy enough that it's already time to start looking for the next technical ceiling in Treasury yields. While it's probably too much to hope for, the first contender will be last week's high yield of 1.125%. It's incidentally the same high seen in the opening minutes of today's trading...(read more)

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