Locking Bias

Mortgage bonds attempted to add to their gains at the open this morning, but have since moved negative and given back yesterday’s gains as well.  Stocks are currently flat after posting gains the last 4 days in a row.  The big news today will be the FOMC Minutes, which will be released at 2 pm ET.  Investors will be scouring the text for any signs of “tapering”.  It seems likely that there would be discussion about tapering, but the recent comments to calm the markets came from some of the typically hawkish fed members.  Most statements after the dreaded Bernanke Q&A session, where he seemed to deviate from the formal prepared speech, implied that tapering would not occur anytime sooner than the economy could handle it.  Earnings season has started, but is also not expected to be full of record profits.  It wouldn’t be a surprise for stocks’ 3^rd quarter to be muted compared to the year to date moves so far.  The bond market has another auction to contend with today, so we will suggest locking in ahead of the volatility.