The Smart Team of NOVA® Home Loans

MBS Day Ahead: Holiday-Shortened Week; Range-Bound Bounce Risk

Posted To: MBS Commentary

The 2nd week of April begins with bonds threatening to embark on another bounce inside the post-election trading range (10yr yields from 2.30-2.64, approximately). We're at the early stages of the potential bounce at the moment, but the current patterns are looking similar to the bounce that occurred in Dec/Jan. Short and long-term momentum metrics are also starting to point more clearly toward higher yields. All that having been said, the negativity is merely the vote cast by the technical analysis. Fundamentals (all the external factors that can affect bond tradings, like data, news, Fed policy, and supply/demand fluctuations) are in less agreement . Increasingly fundamentals tend to support bond market resilience, at the very least. We can't say fundamentals wholly support an outright…(read more)

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Source: Mortgage News Daily

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