Beware the Bounce; Rates are Actually Higher This Week; Fewer Buyers
In the day just passed, the bond market endured a bit of selling pressure courtesy of various overseas developments and an onslaught of corporate bond issuance. Treasuries were resilient in the face of European weakness that advocated a bigger jump in yields than we ultimately saw. Better still, the 10yr seemed highly determined to hold a ceiling of 1.50%. The modest weakness and generally lower volatility helped MBS continue tightening/outperforming which, in turn, helped rate sheets to their best levels in years. In the day ahead, we'll be on guard for our first meaningful bounce since the August mega rally. Yes, there have been one or two other contenders so far, but this is the first day that's shaping up to be as big as those in terms of losses that ALSO follows 5+ days of being unable
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