One consistent trend of bonds, if not all markets, is when you see a quick reversal of trends.
It’s clear that bonds are unstable at the moment, but it does appear that Mortgage Backed Securities are starting to rally after 4 consecutive days of losses. This is common because investors will find the point they consider these securities as a bargain and begin purchasing them.
Mortgage Backed Securities opened up this morning only to give up all of their losses. With 30 minutes left in trading, we’ve gained back all of those mid-day losses and have are up today. If we can hold or continue this trend, rates will end today BETTER than yesterday.
Remember that mortgage rates move in the opposite direction of the bond pricing. When bonds increase in price, rates drop.
