Although there will be economic data on Thursday, and even though there is technically some today, the week remains decidedly focused on setting up for next week's FOMC Announcement. Tradeflows (investors trading based on other trading activity) and technicals (investors reacting to outright price levels) are all we have to go on at times like this. While that's boring, and almost entirely a 'wait and see' affair, at least it's been positive so far.
Case in point: MBS are right up against the range that's been in force since we first discussed it last Wednesday. Below is an updated version of the same chart to show the move back to the highs and a successful--if slightly sloppy--supportive bounce in the mid 103's.
In a similar vein, Treasuries are also bumping against January's best levels. If they continue to shy away from breaking 2.82, we can watch overhead support levels at 2.88 and 2.91 to assess the potential for anything other than "sideways" ahead of next week's FOMC Announcement.
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