Slow And Steady Positive Territory
Excruciatingly little has changed since MBS got in the door this morning, and Fannie 3.0s continue to trade right in line with those longer-term resistance levels seen at the open of 104-07. This isn’t the be all end all ceiling for MBS, but it marks the lower boundary of a price range that’s contained several big weekly bounces stretching back to the middle of 2012. Before the open, US Treasuries were docile-to-positive overnight, holding flat during Asian hours and rallying during European hours. Domestic economic data did practically nothing to motivate movement this morning, despite missing the consensus on all occasions. Trade flows have been the key driver of the day and though there are pockets of correlation, Treasuries have been generally disconnected from the stock lever. The analogous trading level for Treasuries to MBS 104-07 resistance is just under 1.70, stretching down to the high 1.67’s.
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