MBS RECAP: Huge Day For Bonds, For Better and Worse

Without discussing what tomorrow may bring for bond markets, we can safely say that today was big. Both in terms volumes and outright trading levels, we haven't seen a bigger combo since the big stock sell-off in early October, and that came near the top of the rate range. Today was arguably much more significant because it occurred as rates were already pushing multi-month lows. Today was big in a good way in the sense that yields made it all the way down to 2.826%. But the same level raises risks of a technical bounce. After all, 2.82% is the resistance level we've been watching for the past 2 sessions and we bounced fairly hard there today (10's ended at 2.89%). At the risk of stating the obvious, a lot could be riding on tomorrow's jobs report. We have NFP built up to pass...(read more)

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