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MBS Day Ahead: Uncertainty Actually Means Uncertainty

Posted To: MBS Commentary

I'll admit, there are times where I point out some chart-based evidence of uncertainty in the bond market and I feel like we're just delaying an inevitable move. The most recent sideways consolidation felt like that yesterday. Sure, yields were locked inside a nice, linear consolidation range, but with the coronavirus situation apparently improving and US stocks at all-time highs, it felt like we were merely waiting for rates to eventually break higher. What a difference a few hours can make! Stocks are still pretty close to those all-time highs, but bonds have moved to heavily favor the lower end of the recent range. Whereas I noted that the upwardly-sloped trend line was better established yesterday, today's gains quickly level the playing field (i.e. both of the red lines in...(read more)