03 Jul Bonds Hoping 100 Day Moving Average Will Hold
US stocks continue to climb higher this morning in premarket trading, continuing the pattern of volatility. The past week has not been good overall for mortgage interest rates. With mortgage bond pricing now beneath their 200 and 50 day moving averages, hope is that the 100 DMA will hold. If this level is broken, we will see rates move higher once more.
Oil prices rebounded a bit, crossing above $46 per barrel. This move higher is in response to reports of lower supply in the markets as well as a smaller rig count moving forward. This will be welcomed news for the Federal Reserve, as lower oil prices have contributed to a recent slowdown in levels of inflation.
Markets will be closed tomorrow in observance of the 4th of July holiday. We anticipate light volume today as many investors will be taking the day off. This could exaggerate price movements, which could be harmful to bond prices. As a result, we will maintain our locking bias.