Mortgage bonds started the day strong, as they try to make a more decisive move above the 100 day moving average. At this point, they are only a whisker away from the 200 day moving average, which I anticipate will be a more formidable ceiling of resistance. The 10 Year Note also opened higher, with the yield reaching as low as 2.72%. This is close to the lows that we anticipate we will see.
As we close this slow news week, we are again looking at technical to drive the markets. With the stock market in a bit of a slide lower, bonds have momentum. We will start the day with a cautiously floating bias. However, watch closely the 200 DMA. If we hit this level, we may be pushed lower. Should that happen, we will suggest locking.