08 Sep Bonds Showing Signs of a Negative Reversal
Mortgage bonds are lower and stocks are climbing higher this morning. It’s a slow economic news day, so markets will trade heavily based on the technical outlook. From what I can tell, bonds are showing signs of a negative reversal. This is a bad sign for the near-term direction of mortgage interest rates. Given that bonds have been on a strong tear higher for many weeks, this move is now due. If this is right, we can expect to see mortgage interest rates trickle higher over the coming days.
With bonds showing signs of a negative reversal, we will maintain our locking bias.