Market Insider
Some weakness early this morning; the bond and mortgage markets trading slightly worse after another attempt to break 3.10% on the 10 yr note yesterday. Yesterday the 10 yr made another attempt to push below its resistance, just couldn't make it although it did decline 2 basis points with mortgage rates unchanged on the session. Yesterday the bond market had support from continued uncertainty about Europe's debt problems in the "infamous five" countries facing potential defaults. The weaker stock market yesterday also kept safety moves into treasuries alive.
The bond and mortgage markets continue to carry bullish signals, but unless the 10 yr note can crack 3.10% soon most of our technical work will turn bearish. If that happens we don't expect a major increase ion rates but the near term could push the 10 yr note up to 3.25% and mortgage rates up 8 to 10 basis points; in the meantime we have little reason to turn bearish---just an increase in caution at the moment.
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