Mortgage bonds are trading at their highest levels of the year as financial
market investors continue to engage in the "flight to quality" trade.
Investors are favoring the safety of bonds ahead of three key events on
Thursday: (1) the European Central Bank is scheduled to make a decision on
European interest rates and monetary policy; (2) there is a general
election scheduled in the UK; and, (3) former FBI Director Comey is
scheduled to give testimony in Washington. The Fed is scheduled to
purchase a sizable $1.625 billion of 30-year conventional mortgage
bonds later this afternoon. Later this morning we have the JOLTS
report which measures job openings in the economy.
What should you do about it?
Watch for mortgage bonds to continue trading above their 200-day
moving average; but be prepared to lock your rate quickly if
bonds fall back below that critical level.
Economic reports that
may impact mortgage rates this week: