Mortgage bonds ended the day yesterday above their 100-day moving average, only to be pushed back beneath at the opening of the market. This highly anticipated move lower is a bearish signal that could lead to further deterioration in bond market prices. We are one step closer to being pushed out of the narrow range in which bonds have been trading.
With a lack of economic reports scheduled for today, the technical outlook will come into play. Overall, that isn’t favorable for mortgage interest rates. We could see volatility increase as the day wears on.
We will maintain a locking bias.