We haven't been shy about characterizing the potential breakaway from 2+ weeks of sideways range as a "lead off." In case it needed any explanation, this is the metaphor we use to convey a sort of cautious head-start on anticipated trading direction, just like a runner in baseball might take a lead-off from the base they're currently occupying either to steal the next base, or just be in a better position to run when the ball is hit. The range of 10yr yields and MBS prices that equate to the current "base" is 1.73-1.67 in 10's and 104-02 to 104-12 in Fannie 3.0 MBS. The lead-off then, clearly started at the end of last week and continued yesterday. It was tentative at first but became less so this morning. Fannie 3.0s ran all the way up to 104-25 and 10's hit 1.638. This was a bit too much of a lead off. The metaphorical pitcher turned and our base-runners retreated to their base. This is easily seen in the following chart of 10yr yields (note the "base" at 1.726 to 1.672 and the progressively larger lead-off leading up to today's new low and quick snap back):
Please note the timestamp in the following price table (11:05am). This was from before the sell-off that brought MBS back to yesterday's levels. The MID-DAY recap is occasionally delayed in order to facilitate a reprice alerts for our MBS Live subscribers if they're necessary in the 11am hour, and those reprice alerts will be reflected in the end-of-day "MBS RECAP." Current prices aren't quite back to these levels.
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