Posted To: MBS Commentary

10yr Yields at 0.96% a Best-Case Starting Point For a Bad Reaction in Bonds The election (referring both to the presidency and the composition of the Senate) is the biggest of actionable information since the pandemic first rocked markets in March. Yields have been pushed up to their 2nd to last post-covid ceiling at .88% (next stop would be .96%). Many market participants see this as bonds' way of cautiously pricing-in a blue sweep. Since that scenario is far from a given, it means a showdown with 0.96% 10yr yields would be a best-case starting point if the blue sweep is confirmed (assuming that the prevailing logic is correct, of course… unlike 2016). It can be argued both ways. The argument can only be won with the benefit of hindsight. It makes more sense to err on the side of caution…(read more)

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Source: Mortgage News Daily