Mortgage Bonds and the 10-year Treasury ended the week mostly unchanged as they have been the past week, and continue to trade sideways in wide ranges between support and resistance.
Mortgage-Backed Securities are between a tough overhead ceiling of resistance at 100.872 and a triple floor of support at the 100.427 Fibonacci level and 100 and 25-day Moving Averages.
The 10-year is also in a very wide range between support at 4.18% and overhead resistance at the 100 and 200-day Moving Averages.
We must remain on guard as MBS and Yields are susceptible to big price swings within these wide ranges. We will likely remain rangebound until some of the important economic data next week, highlighted by the Fed’s favorite measure of inflation, PCE (Personal Consumption Expenditures), which we think could come in lighter than estimates – More on that next week.