MBS RECAP: Relentlessly Determined To Grind Sideways Into Weekend

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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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