Mortgage Bonds continue to trade in a sideways pattern beneath a tough ceiling of overhead resistance, marked by the price highs seen back in mid-November.
There are no economic reports due for release today and the rest of the week’s calendar is on the light side. However, some volatility could be provided by this week’s added supply of Treasury auctions in the form of 3 and 10-Year Notes along with 30-Year Bonds.
We have a light calendar this week with the spotlight on retail sales, imports and consumer confidence. Janet Yellen gives her first semi-annual monetary policy testimony tomorrow, before House Financial Services Committee, in Washington. While we expect Yellen’s ideals to be quite similar to her predecessor’s, this will be a good opportunity to see the new Fed chairwoman’s stance on policy and the current economic condition. Little change to the yield curve with MBS tightening 1-2 ticks.
I am continuing to recommend a locking stance until such time that I can clearly see Mortgage Bonds break above those key technical overhead levels. If anything changes, I will get back to you.
Have a great week!
