Quiet day for scheduled reports

Both mortgage bonds and stocks are higher this morning, with stocks again setting new all-time high records. Although today is a quiet day for scheduled economic reports, the wires heat up tomorrow with ADP scheduled to release their estimate of new job hires for the month of September, as well as Mortgage Application data for the prior week.  Given the massive flooding in parts of the U.S., both numbers are expected to be below normal.  This will be a more difficult report to understand for that reason.

Mortgage bonds remain trapped in a tight range, between support at the 100-day moving average and over-head resistance at the 50-day moving average.  The 10 Year Treasury Note yield remains above its 200-day moving average, which is not a good sign for mortgage interest rates.  Unless the 10 Year yield can fall below this critical level, mortgage interest rates will have a difficult time experiencing any significant gains.

With mortgage bonds remaining trapped, we will maintain our locking bias.