Locking Stance: LOCKING Mortgage Bonds: -6bp
Mortgage bonds have been able to hold above their 200-day moving average with some help from a dismal stock market. But for how long?
After opening higher, they are already pointed lower and retesting their 200-day moving average, so far being able to bounce back off of it. But today’s news may prove overwhelming as the ADP Employment Report shows job growth, and while not an accurate picture for Friday’s event, traders do not like what they see.
Adding to the continued news of a better than expected economy, the ISM Services Index beat expectations, adding more pressure to bonds and lessening recessionary fears. Less fears of recession mean one thing, refocus to that of inflation and that is not good news for bonds.
