Posted To: MBS Commentary
With yesterday offering the first legitimate push back against the recent sell-off, today becomes one of three critically important days in establishing a ceiling for bond yields (or a floor for MBS prices). With Biden announcing stimulus details tomorrow, and Retail Sales on Friday, we wouldn't expect a bond rally to get too far ahead of itself today (if it does, that would be very telling, in a good way). The goal for bond bulls is simply to avoid slipping back into sell-off mode. Conventional wisdom suggests weakness is a bigger risk in the hours leading up to the 1pm 30yr bond auction. Trading doesn't always stick to that script, of course, but the point is this: if yields are rising between 10am and 1pm, we'd want to wait to see what happens after 1pm before concluding all…(read more)
Source: Mortgage News Daily
