06 May Cautious Float
Mortgage bonds saw one of the toughest days they have seen in a long time on Friday. A drop of 60 basis points, ending virtually right on the 200 DMA, as stocks rallied with the Dow crossing 15,000 intraday due to the better than expected Jobs numbers. Markets opened this morning with stocks and bonds both close to flat for the moment. This is virtually an empty week for economic reports, with Thursdays Initial Jobless Claims as the only exception. However, the bond market will have to face $72 billion in auctions. We will maintain a floating bias as long as bond prices stay above the 200 DMA.