MBS Day Ahead: Bonds Biding Time in General Despite AM Gains

The current week fills a corrective role in the bigger picture, helping to officially mark the end of 4 straight months of accelerating improvement (which, itself, followed 4 straight months of accelerating weakness).  Now that we’re here in the 1.3’s in 10yr yields, it seems like no coincidence. After all, this is where bonds paused for heavy reflection in 2012 and 2016–each time deciding to move back up to more familiar levels. 

This time around, yields are approaching from below, and pausing to see if there’s enough justification to continue higher.  They’ll…