Locking Stance: LOCKING Mortgage Bonds: -50bp
Mortgage Bonds gapped lower this morning. I had expected the correction was over, highlighting the 50% retracement mark in my evening report. The other aspect for switching stances is that bonds pulled back heavily after hitting their 25-day moving average.
Why the pullback? Strong economic news, just like the weak news in the past few days shot bonds higher. Today’s news was that Durable Goods Orders blew away expectations, coming in at 0.8% versus -0.3%. As a result, bonds are lower.
