Locking bias

After a day off to celebrate Good Friday, the stock market is moving higher once again this morning.  Friday’s Bureau of Labor Statistics (BLS) Jobs
Report showed that only 126,000 new jobs were created in the month of March.  This was far less than the 230,000 the markets anticipated, and
was the lowest number in almost a year and a half.  In addition, the previous two months’ numbers were revised lower by a combined 69,000. 
The Unemployment Rate remained stable at 5.5%.  Overall, this is a very weak report.  A part of the drop can certainly be attributed to the
drop in oil prices and the job losses due to oil rigs being closed around the country.  This certainly has impacted parts of Utah, where up to
50% of certain pockets of our economy are driven by oil production. 

In spite of the weakness in the jobs data, mortgage bonds should have made a much stronger run higher.  However, that hasn’t so far been the case. 
Mortgage bonds were open for a shortened trading day on Friday, where they ended the day only trading less than 38 basis points higher.  This
is a relatively small move for such an important report.  So far today, mortgage bonds have given up 31 basis points and are now at their lowest
point of the day.  Stocks should be heading lower as well.  However, the Iran nuclear deal is likely adding strength to the stock market,
as investors see this as an opportunity to make another run higher.  Unfortunately, this isn’t giving mortgage interest rates the opportunity
to improve much. 

With today being a quiet news day, mortgage bonds will trade heavily based on technical factors.  Bonds are again trading in a wide range, just beneath
an important ceiling that hasn’t been broken since early February.  This makes the risk of floating very high.  Therefore, unless we make
a run above current resistance, we will suggest a locking bias.