Bonds Bounce Lower

After hitting their 25-day moving average yesterday, mortgage bonds have begun retreating. Given this negative indication, we can anticipate a fall to test the bottom of the channel.

Earlier this morning, the National Association of Realtors Chief Economist discussed housing and the recent tax reform bill. He feels real estate will be flat because of the tax benefits lost for owning real estate.  Although this could slow appreciation in higher state tax locations, it shouldn’t have too much of an impact in most states.  It will be something we will be closely watching as we analyze the impacts yet to be seen.

With today being another slow day for economic reports, trading will be light. We suggest a locking bias.