Posted To: MBS Commentary
Wednesday's reaction to the Fed was essentially a non-reaction with yields ending the day very close to pre-Fed levels. Traders were more willing to make stronger bets in the overnight session and that momentum is gathering steam at the start of the domestic session. 10yr yields quickly find themselves knocking on the 1.37% ceiling despite a lack of new inspiration. This is the 'unseen hand' at its finest (bigger picture, strategic trading motivations as the deepest pockets reposition for the road ahead). If you simply must have a scapegoat, the 30k-ish drop in case counts (Wed vs Wed) is a great place to start. The typical 10yr yield candlestick chart runs the risk of endorsing complacency at the moment because the consolidation pattern hasn't yet been officially broken. While…(read more)
Source: Mortgage News Daily
