MBS MORNING: Rates Rally Extends But Progress Stalls Before Auction
ByPosted To: MBS Commentary
Good Morning All. Today is the last full trading session of 2009. In relatively high volume, the rates market was able to hold yesterday's gains in overseas trading last night. As MG pointed out in MBS CLOSE last night, the move off of recent price lows/yield highs was supported with modest SEASONAL volume. I call attention to 'seasonal' because although volume was above average, it was only strong relative to other post-Christmas pre-new year trading session. At the moment the 3.375% coupon bearing semi-annual 10yr TSY note is trading flat, +0-01 at 96-17 yielding 3.799%. Notice what was once RESISTANCE is now SUPPORT. Next target in 10s is 3.76 then 3.72…if momentum really picks up we will see a test of 3.68 then 3.62. If yields move higher, support is found at 3.88%. In the…(read more)