Posted To: MBS Commentary

There have been reasons to fear a momentum shift in bonds for several weeks now. Here's how we discussed it at the beginning of October: "It's never a bad idea to consider risks on the road ahead–especially when things start deteriorating at the beginning of the month. We often see a shift in momentum with a new month when the previous one was fairly consistent with a certain theme. September's theme was definitely consistent." We went on to discuss a small scale breakout of a consolidation pattern that occurred well inside the already super narrow .62-.72 range. At the time, we concluded that things would be getting more serious when the .72 ceiling gave way. 4 days later, it did. The entirety of the 10/5 – 10/9 week was spent bouncing at the 0.79% technical ceiling…(read more)

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Source: Mortgage News Daily