Think back to October 17th. MBS opened slightly weaker and ended the day down about an eighth of a point. That was the last time we had a weaker start, and there are some parallels to today. In both cases, the weakness was modest. In both cases, the previous session closed at the best levels in at least a month. In fact, yesterday's 5.0 MBS prices matched their best close in over a year. We can definitely forgive (and possibly even expect) a small pull-back after such a consistent rally. As discussed in yesterday's video, it was beginning to seem like a good moment for broader consolidation.
And a bonus chart in light of yesterday's discussion of oil prices... Clearly not a 1:1 correlation, but fans of the oil/Treasury connection could at least say the rebound is not doing us any favors.
Think back to October 17th. MBS opened slightly weaker and ended the day down about an eighth of a point. That was the last time we had a weaker start, and there are some parallels to today. In both cases, the weakness was modest. In both cases, the previous session closed at the best levels in at least a month. In fact, yesterday's 5.0 MBS prices matched their best close in over a year. We can definitely forgive (and possibly even expect) a small pull-back after such a consistent rally. As discussed in yesterday's video, it was beginning to seem like a good moment for broader consolidation.
And a bonus chart in light of yesterday's discussion of oil prices... Clearly not a 1:1 correlation, but fans of the oil/Treasury connection could at least say the rebound is not doing us any favors.