After an uneventful overnight session, MBS and Treasuries both began the day in moderately stronger territory, but only when compared to Friday's latest levels. Compared to the entire previous trading day, today continues to trade "inside" the highs and lows.
MBS are closer than Treasuries to breaking out of these respective inside days, but that's only an observation about current trading levels. There's no clear trend emerging other than "sideways" in Treasuries coupled with outperformance in MBS.
In that regard, trading is lining up well with the calendar, considering the calendar is empty in terms of potential market movers. MBS roll tomorrow and the demand for February coupons to deliver vs the supply may be a factor in the outperformance.
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