12 Nov Locking bias
Mortgage Bonds are near unchanged this morning. Bonds are still struggling as they have lost nearly 200 basis points since the peak in October.
The economic report today was Weekly Initial Jobless Claims. They were unchanged from last week, so that will have little impact. The results from the $16B 30-year Bond auction will be released today as well. With Tuesday’s 10- year Note auction being just OK, it did nothing to help prices recover. Fed Fund Futures now show a 66% chance of a rate hike in December.
With Bonds trading beneath an area that was once a solid support, now a ceiling of resistance, we will recommend a locking bias here.