MBS Day Ahead: Moving Averages Suck (And Other Thoughts to Kick Off The Week)

Last week brought a bit of a bumpy ride for bond markets with trade-related news accounting for most of the drama. Things were more uneventful on the first 3 days of the week, but Thursday and Friday saw yields threaten to resume the sort of uptrend seen at the beginning of September. With the overall rally trend closing in on its first birthday and with the total drop in 10yr yields being roughly 175bps as of last Monday (3.26% in late 2018 to 1.51%), every time selling pressure picks up in a noticeable way for more than a day, it forces us to consider the mortality of that long-term trend. In other words, is this the beginning of the end of 2019's rally? Are last week's rates the lowest we'll see in a long time? I think the market is going to do a pretty good job of letting data...(read more)

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