MBS RECAP: Reprices for Worse Reported


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2:07PM  : 
The Week Ahead: 10yr TSYs Hold 3.075 Heading Into NFP Week
10yr notes are finishing out the week at 3.075, right on the “snowball” level mentioned yesterday when it provided the first and highest-volume bounce of the day. Bottom line, the market has had 2 days of exceptionally high volume to decide on these levels and both days congregate in similar territory. Is it a bullish indication of things to come or a bearish warning of a pull-back? That’s a fair question and one that stands a good chance of being answered, at least in part, by next week’s NFP. Indeed, from a technical perspective on the longest term charts, next week is eligible to act as either a bounce back into weaker territory or a breakout into lower yields. If 10’s break lower, it would be one of only 3 times that particular trend would have been broken since before 2005 (the others were the initial 2008 crash and the 2010 repeat crash). Between now and next Friday, there are plenty of market-movers, including Consumer Confidence, ISM Manufacturing, Chicago PMI, ADP Employment, Case Shiller, and Construction Spending just to name a few. With the shortened week, the abundance of econ data, and the looming NFP, we could see all manner of pitchy price movements in MBS, but the key vote for the longer term momentum centers on Friday.

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Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/213568.aspx

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