After suffering multiple days of losses, mortgage bonds are attempting to stabilize this morning. Mortgage bonds started the day higher, but have since pared their gains and are now near flat. The 10 Year Treasury Note is sitting right on its 100 day moving average. If yields break any higher, there is another 12 basis points that they will likely move higher before hitting the next ceiling. Yields on the 10 year are now at 2.53%, which are near the highs last seen in late June. If yields do break above the 100 DMA, that will add tremendous pressure to push mortgage interest rates higher.
Weekly Jobless Claims were reported this morning, showing that 315,000 new claims were filed in the week ending 9/6/14. This is an increase of 11,000 over the prior week, and higher than the markets anticipated. It was also a shortened holiday week, which would seem to help lower claims, since there were only 4 days jobless employees were able to submit for benefits. Although the markets seemed surprised, it seems reasonable to assume that many seasonal businesses start their winter layoffs near the time when students go back to school. Therefore, it an increase in claims should have been expected.
With mortgage bonds attempting to stabilize, we are hopeful that losses will be subdued. We will maintain our locking boas until bonds have proven to have the strength to make another run higher. Watch the 10 Year Treasury Yield closely. A break higher would be harmful to mortgage rates.
As we reflect upon the tragic events that occurred 13 years ago today, our hearts go out to those who lost loved ones. Our Country will never be the same, and we will never forget.