Did they zig when they should have zagged?


One might be a bit perplexed by the bond run since Wednesday.  Let’s see:

Bad data – check

Yellen bomb – check

Likely illiquid approach to 3 Day US holiday weekend – check

Yet here we are testing 2.40.

Look, if you read my round and round blog posts this isn’t a huge surprise, yet the timing does seem weird.  As I indicated, I felt like nothing had transpired that would break our current range.  In my humble opinion, this is clearly a rejection of 2.55 and back we charge toward a 2.3ish.  

It just seems a bit backwards in that we tested the higher range on bad data and since the good data we’ve bounced.  As backwards as that may seem, don’t question it.  If you forget the noise and embrace the range, this makes sense.  As I’ve established, this is generally not a very rate friendly few weeks, so I’d take advantage of these dips, locking the lower end of the range.  On the heels of our biggest lock day of the year yesterday, it seems you agree.  

Here’s to more of the same today.

-Philip Mancuso

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