Posted To: MBS Commentary
If the markets were to close right now, 10yr yields would be higher than they've been in almost four months. MBS prices have fallen more in the last two weeks than they have in over four months. The 4.5 coupon is now discussed not in terms of 102, but rather fighting to stay above 101-00. The 10yr tsy yield is fighting to stay below the outer limit resistance we've been discussing at 3.56. It's a bad day. You might take solace in the fact, however, that important support levels are at least showing signs of life with 100-31 withstanding a couple test so far this AM. This also helps clarify our stance for the rest of the day: if you're not locked up already, use 101-00 (or 100-31) as your trip wire. Should prices fall below, we'll alert you asap. Support at 3.56 is fighting…(read more)