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Despite the 4 tick improvement on the day that leaves MBS just about as close to all time highs as we could ask for, the lack of excitement this week is a bit of a let down. Sure, there was plenty of chopatility earlier in the week in MBS, but not only was it mostly confined to the range, prices actually ended exactly where they started on Monday! At
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With absolutely no exaggeration, all but one, maybe two of the times I've looked at my screens before writing this week MBS have been between -2 and +2 ticks on the day while changes in tsy's have been more pronounced. Same story today, at least on a price level, as 4.5's are up 2 ticks to 101-23 whereas 10's are down 6 ticks, bringing
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Earlier in the day we discussed movement in MBS prices that brought 4.5's to their lowest levels of the session, but we mentioned some support for MBS as well as some support for tsy yields that had been weakening at the same time. By closing time, those ranges identified much earlier in the day held up, carrying us into tomorrow, a data-free options
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This is one of those obligatory alerts where price action in context doesn't justify an alert, but MBS prices have touched their lows of the day. In addition tsy's have broken out of their trend of improvement on the day with the 10yr backing up 3.35. Will there be reprices? Tough to say, considering the nice, flat resistance going back to yesterday
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Thursday's tend to be data-rich and today is no exception. After the "with us as always" jobless claims at 830, a concentrated dose of data and headlines hit at 10am. In the ongoing court case of Reality v. Stable Economic Recovery , Philly Fed survey served as chief counsel for the defense, topping expectations of 12.0 with a 16.7 reading
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It hasn't received as much air time these days, but the range trade and technical price levels are still very much in play. That has to do with the slightly less paradoxical directionality these days. Markets have tended to move in the direction suggested by data to a much greater extent than the summer months that saw the release of our hit single
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Rather than dismiss the trend of lower yields in tsy's as more likely to stop at 3.32, perhaps we should have focused our analysis on what yields might do on the upside! For now, however, both MBS and the 10yr movements are simple if not elegant examples of the technical levels we discussed this AM. You get resistance from the downtrend at the red
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Despite MBS performing slightly better than tsy's at the moment, the general theme of the week has been to hold steady while tsy's rally. The 3 day chart of this week's price movements so far does an amazing job of conveying this. We have the constantly revisited internal trendline (also the weekly MEAN, also the weekly MEDIAN! Could it
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After a fairly diffuse smattering of diverse data over the past two days, Wednesday changes things up. Unless you ascribe any special importance to oil inventories, both of tomorrow's headline items hit right at 830am, preceded by the standard weekly MBA survey at 7am. As far as the double impact at 830, it's CPI and Housing starts... Both always
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4.5 MBS briefly crested 102-00 earlier today, just before noon, and have since fallen to 101-26. More recently, prices hovered closer to 101-30 making current levels good for about a 4 tick fall. In the AM post, we said: "if the bond market can create additional momentum while maintaining its flatness, it would allow for some much-needed spread