Fixed Mortgage Rates are down from Friday.
Mortgage Backed Bonds are trading higher on the day by over 40 basis points but are getting pretty close to a tough level of resistance at the 200 day moving average. This ceiling coupled with the amount of supply that will be put on the market in the next few days is likely to stop Bond’s rally in its tracks. Remember that this week the Treasury will be auctioning about $104 Billion in notes that has crushed Bond Prices in the past month. What may save bonds however, is the Fed meeting that concludes on Wednesday afternoon. As no one expects the board to change the Fed Funds Rate, its comments on the purchase program of Mortgage Backed Securities may be a huge market mover. If the Fed announces plans to increase the aggressiveness of purchasing Mortgage Backed securities in the near future, it could give Bonds the boost they need to start a rally that could help decrease interest rates in the coming weeks.
Current Outlook: Very cautiously floating