We will continue to float as Mortgage Bonds seem to be stabilizing.
After a week of getting roughed up, Mortgage Bonds are attempting to stabilize. At some point, lower prices lure in buyers. The bad news – the Bond has fallen through multiple support layers, meaning they now become resistance.
The tensions in Ukraine are heating up after the U.S. has intensified sanctions against Russian President Vladimir Putin's inner circle in an effort pressure his government to back off annexing the country. The U.S. sanctions ban certain individuals’ entry, freeze any personal assets they may have in the U.S. and bar them from doing business with any U.S. company or financial institution. If tensions escalate, we will likely see Bonds push higher.
As mentioned, Bonds have broken through multiple floor layers with the only saving grace being that prices are attempting to stabilize over the past 24 hours. We will continue to carefully float, but be mindful that if the selling picks up, we will quickly move to locking.
There were no economic reports released Friday.
The 4% coupon rose by 12bp to end the session at 103.81.
The Dow lost 23.40 points to 16,307.39, the S&P fell by 5.38 points to 1,866.59, while the Nasdaq dropped by 42,49 points to 4,276.78
Have a great weekend.
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