Posted To: MBS Commentary
Ranges Ranges Everywhere… Right? We've kept the topic of 3.56 open as an outer limit for the 10yr tsy as rates began to back up earlier this week even though the long term range definitely favors something around 3.5. Indeed today the outer-limit range assumptions were tested today, and thankfully have held up for now. But the outer limits are no different from the various stops that define the more central points of the range in that broken support becomes resistance and vice versa. And so it is that yields have had a hard time coming back across lines drawn in the sand in the past two days. MBS are exhibiting similar behavior as they look unable to get back above this AM's highs, however due to all the progressive spread tightening, MBS are merely dealing with 2 month lows versus…(read more)