Part of the yesterday’s late market action, stocks rally/bonds slipping, had to do with a rumor about the Fed. Word has it that they may stop paying interest on excess reserves and step back into the market buying fixed income assets (treasuries and mortgage backs). Given that backdrop, Gentle Ben heads to the hill today, testifying to the Senate in his annual Monetary Report to Congress. This could be a market mover so heads up around 2:00 pm cst. Otherwise, its steady as she goes with stocks plus 9 points on the Dow, 10 year note down 3/32’s, and mortgage backs unchanged.
Technically, the early strength helped to recover from yesterday’s selling. That has put the chart back into a neutral pattern, allowing the slightly bullish trend to continue on the daily chart. We came close to our target of 2.88% but no cigar. Now the market will need to rally soon or this will become just another range trade. Failure to rally isn’t bad, just paints the chart neutral which will cause Austin mortgage rates/pricing to stay close to current levels. Kinda like being all dressed up and no place to go.