Surprisingly Unchanged After Bumpy Ride

The past two days have been quite something for MBS markets–not in any meaningful way, but certainly frustrating.  Reason being: BOTH days have opened at higher levels than every single session since last Tuesday’s NFP and BOTH have closed below the lowest closing levels from any of those days.  I sometimes mention “inside days” (where trading ranges are contained inside the previous sessions’ range).  These were two examples of “outside days,” and not just outside the previous session, but outside most of the past two weeks!

That’s not all that uncommon after holding a range that’s as narrow as most of the past two weeks, but it’s far less common to see it two days in a row.  Imagine you’re a bowling pin that’s been watching gutterballs all day.  Then you and your nine buddies suddenly get knocked over.  Thankfully you get picked back up shortly thereafter and can get back to the business of watching gutterballs, but wait!  Another strike!

These things happen in bowling and MBS, but they’re no fun for the pins or the MBS-watchers respectively.  It may not have felt like it if you were watching too closely, but MBS ended up in positive territory by the end of the day.