Mortgage bonds have fallen beneath a long-term “floor” of support. That “floor” has now become a “ceiling” of resistance and is preventing bonds from moving higher and rates from moving lower. Lenders should understand that rates will not improve unless the bond can bust back above what is presently a strong resistance layer.
At 1:00 p.m. ET, the Treasury will be selling $16B 30-year bonds and comes after two stellar auctions on Tuesday and Wednesday. The great auction results have not helped the bond market, as prices have sold off after each of the releases.
Mortgage Market Guide