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MBS Day Ahead: After Exiting Friendly Trend, Bonds Wait on Tax Plan for Next Cue

Posted To: MBS Commentary

The order of the day and week for domestic bond markets has been and will continue to be the break out from the recently friendly trend toward lower rates that began in mid-March. We've been eyeing this breakout since last Friday when a combination of French election polls and Trumps tax plan pre-announcement caused an intraday break above the yellow lines in the following chart. Deceptively, Friday saw yields move back inside the trend by the close, giving the impression that the breakout was not a done deal. After the election results came out, it became clear that we'd be looking at another challenge of the trend. Monday and Tuesday add up to a definitive break as well as a definitive shift in short-term momentum. Today's big to-do is the tax reform announcement that Trump referenced…(read more)

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Source: Mortgage News Daily

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