Posted To: MBS Commentary

Bonds are either on the doorstep of critical line in the sand, or they soon will be. These lines are drawn on the technical ceilings at 1.37% and 1.43% in 10yr yields. With highs of 1.375% already hit this morning, the first battle is well underway. At this point, Powell's Jackson Hole speech wouldn't need to be too terribly hawkish tomorrow in order to tip over some technical dominoes that lead to the next battle at 1.43%. If that battle is lost and covid numbers stabilize, we could be witnessing the confirmation of a longer-term uptrend in rates (the one we were worried about seeing upon the completion of the mid-2021 "intermission"). Here are the relevant pivot points in 10yr yields. Here is the big picture pivot zone. The lower line is the 1.21-1.24 gap (let's call…(read more)

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Source: Mortgage News Daily