Posted To: MBS Commentary

Last week did a nice job of confirming a ceiling in Treasury yields after the previous week saw rates move sharply higher. At the same time the S&P hit a new record high and covid numbers continued to level off. Now at the start of the current week we have more upbeat covid-related news (FDA approved plasma treatment), another surge to new all-time highs in stocks, and a bond market that doesn't appear particularly concerned with either. What's going on here? Why are bonds willing and able to make these nice, linear gains over the past week without regard for the things that strongly suggest they do the opposite? The first and most basic explanation that comes to mind is that of ' technicals .' This has come up quite a bit recently in the context of yield spike 2 weeks ago…(read more)

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Source: Mortgage News Daily