Market Closes At Day Lows

After a strong opening we watch the mortgage backed securities market fizzle out this afternoon and finish 2 ticks down on they day. This is particularly troubling considering the fact that treasury yields today were relatively flat. In essense this infers investors in the mortgage backed securities market have deemed the market inflated and are selling off to protect their portfolio.

Considering this week is the first week without Fed intervention in MBS, it is interesting to watch current movement. Clearly our market is weaker with losses occurring throughout the week, but the losses have been minimal. No large sell offs or firesales. There does appear to be some support at these levels, regardless the water is slowly coming to a boil. Right now rates offered to consumers are still very low. It appears as though this is slowly changing and rates are beginning to rise; question is how large of a flame is under the pot of water.

Let is all hope for a strong day tomorrow in the MBS market which will bring interest rates down for all of us.