25 Aug Locking bias
Mortgage bonds have started the day with the same low-level energy they have experienced the past few weeks. A look at the chart shows bonds basically hovering near their 25 day moving average for the past several weeks. This support line has proven its strength time and again. However, the longer this goes on, the greater the odds of a more significant drop when bonds finally break beneath support. That is certainly not something the mortgage industry is looking forward to, however, knows it will eventually come.
Durable Goods Orders, which measures new orders placed with domestic manufactures of factory hard goods, was reported to have move 4.4% higher. This was stronger than the 3.7% expected, and was a strong showing of strength that was certain to impress the Federal Reserve.
With mortgage bonds still limping along, we will maintain our locking bias.