MBS Recap: Best 2-Day Winning Streak in Quite a While

For the purposes of this recap, "winning streak" would be defined as a day where Fannie 3.5 MBS or 10yr Treasury yields closed at better levels than the previous closing levels.  The more days in a row where that happens, the longer the winning streak would be.  Without further ado, I present to you the largest winning streak since early November!

How many successive days of improvement did it take?  Well... just the one.  That's right!  We actually haven't had a successive day of gains (vs the previous close) since early November.  Even then, one might point out that early November gains only came after a late October sell-off to the weakest levels in more than 6 months.  In that context, we haven't really had any winning streaks in close to 2 months.

This isn't to say that yields haven't moved higher and lower inside their recent range--simply that they haven't much cared to string the winning days together.  To be fair, the same could be said of the losing days for most of the past 3 weeks.  Bottom line: things have been sideways, volatile, and noncommittal as we wait for fiscal and monetary policy decisions.

There were no specifics to drive the past 2 days of improvement--at least not the sort of specifics we're used to dealing with.  Economic data hasn't had much of an impact.  That's especially true of this morning's ADP Employment data and even the Productivity and Costs report.  The latter appeared to move bonds at first, but it was actually a block trade of 5yr Treasury futures that got the party started at 8:26am ET, 4 minutes before the data came out.  "Party" is also a relative term as we're talking about very mild movement relative to any other random 5 minute cross-section of the day.

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