Bonds Make Small Technical Improvements

Mortgage bonds have made some gains this morning. With all moving averages above current levels, market improvements could be limited.  If we see bonds able to break above their 25-day moving average, there will be additional room for continued improvements.  Now that the hype over the tax reform bill has passed, markets can normalize and find a place of balance.  There is no fundamental change to the state of the U.S. economy that should have led to the higher rates we have experienced. It was solely a speculative move based on hoped for improvements because of lower tax rates.

Today is once again a relatively slow day for economic reports. As a result, markets will trade based on the technical picture.  As of now, that is a good indication for mortgage interest rates.

There is limited risk in floating today, however, there is limited upside benefit as well. If you choose to float, watch the markets closely.