Now we have no immediate pressure to lock

Mortgage bonds are attempting to break above support this morning, having broken above for minutes at a time just to be pushed back below.  This is
a good sign for near term mortgage interest rates.  If there are able to muster the strength to make a break higher, they will be back in the
sideways channel they rode for several weeks.   Coincidentally, the 10 Year Treasury Note yield is also trying to break a barrier that is
preventing yields from falling further.  All it will take is for one of the two to accomplish the goal; the other will likely follow.

The strength in the bond market this morning was fueled by a weaker than expected Durable Goods report for the month of March.  Overall, the report
showed a gain of 0.4%.  This was lower than the 0.5% anticipated.  However, Durable Goods excluding transportation was -0.2%.  This
was much lower than expectations of +.03%.  Further, last month’s figure excluding transportation was revised lower to -1.3% from the -0.4% that
was originally reported.  The weakness in Durable Goods orders further rebukes the hope that lower oil prices would lead to more durable household
purchases.  In fact, the opposite is happening.  The savings felt by each household isn’t great enough to justify large purchases. 

With bonds making a run higher, there is no immediate pressure to lock.  However, bonds are now at the top of their current channel, which increases
the risk of floating.  The general rule is to lock when at the top and float when near the bottom.  Therefore, the risk in floating at this
level is high.