MBS RECAP: Morning Weakness Defeated but Resistance Remains


MBS tell a bit of sunnier story than Treasuries today as Fannie 4.0s were able to break their 2014 highs by one whole tick (1/32nd).  10yr Treasuries better capture the theme, hitting 2.819 at their best levels EXACTLY matching the lows seen on Friday and last Monday.  Needless to say, it will be a good resistance level to watch before and after next week’s FOMC Announcement.

To be more clear, the theme referenced above is one of “leveling-off at the best levels of 2014.”   In current territory, bonds have done much to account for any small shift in tone from the Fed, but remain in weak enough territory so as to not be hung out to dry if the Fed stands pat on tapering.

Today was uneventful, though it might not have been if bonds kept losing ground in the morning.  As it stands, the losses were shed by mid-morning.  MBS made it a few ticks into positive territory and have dialed back a bit ahead of the close.

10yr Treasuries

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