Look at that treasury yield (yellow graph). It is the rising treasury yield that is ultimately encouraging investors to sell off mortgage backed securities this morning. With that said it should be noted that currently we are even on the day, but that does not change the sentiment of investors today which you can clearly see favors the bears. I would be very surprised if we rally into gains today, and expect us to sink further into the red. How low our market will fall today is difficult to say. It will depend primarily on treasury demand. Regardless expect worse pricing today for rates...
Moving forward... today is will most likely result in a new level of resistance for our market. In other words, today's pricing will be some of the best offered in the weeks to come. Lock.
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