It’s getting a bit eerie at this point. MBS have had extra calm afternoons every day this week, and haven’t lost meaningful ground on any of them. On an optimistic note, Treasuries may be in the process of confirming a bounce off the inflection point at 2.46/2.47 (meaning it was a ‘floor’ for yields into July and has now become a ceiling in August). Today marks the first move decidedly lower after bumping into the inflection point for the past 2 sessions.
Positivity came courtesy of overnight economic data in Europe, domestic economic data this morning, and the completion of the week’s Treasury auction cycle. The only pessimistic note is that bonds have yet to make a convincing move back toward last week’s best levels.