Rate Markets Update!

UNDERSTANDING THE MARKET TRENDS AND NEWS

  1. Market Analysis
  • Bonds are not performing well.
  • The rally last week seemed unsustainable.
  • Bounced off the Fibonacci 38 level, a normal retracement point.
  • Currently retesting the previously broken Fibonacci level.
  • Concern about lack of news impacting market movements.
  • Charts indicate a potential sideways movement between two Fibonacci levels.
  1. Upcoming Events
  • Fed members speaking throughout the week.
  • Wednesday: Existing home sales and FOMC minutes.
  • Thursday: New home sales, building permits, ten-year auction.
  • Friday: Consumer expectations, settlement, durable orders.
  1. Mortgage-Backed Securities (MBS) Analysis
  • MBS came above the Fibonacci level.
  • Rejected at the resistance level of 99.40.
  • Potential downside to around 98.40, a 30 basis point drop.
  1. Conclusion
  • Caution is advised due to uncertain market conditions.
  • Charts indicate potential for sideways rate movement.
  • Lack of significant news events until mid-week.
  • MBS facing resistance at 99.40 level, with possible downside to 98.40.