MBS RECAP: Relentlessly Determined To Grind Sideways Into Weekend


10’s thus far, definitely fighting off any thought of testing mid 1.64’s ceilings, down to 1.6266 currently. 30’s backed down from quick trip to 2.74+ ceiling to 2.728 currently. MBS approve.

Fannie 3.5’s looking technically sound, several ticks above the 104-24 pivot at 104-26. Crossing below 104-24 would signal increasing risks. The comparable level for 3.0’s is roughly 102-05, and we generally have to keep an eye on both these days. Point being, a break below either pivot point signifies increasing risk even if the other coupon is holding.

Bottom line though, these pivot point tests/breaks ARE NOT occurring now, and may not occur at all if benchmarks continue to shy away from the initial post-auction weakness. So far so good, steady as she goes, and all the rest of those colloquialisms can be taken as read…

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