August 22nd, 2022 - Market Update
Current position: Locking Bias
Stocks and Mortgage Bonds are both sharply lower to start the day.
This week will be highlighted by New Home Sales, Pending Home Sales, the second reading on Q3 GDP, The Fed's favorite measure of inflation, PCE, and the Jackson Hole Economic Symposium.
During the Jackson Hole Symposium, Fed Chair Powell will lay out the Fed's plan and can be a big market mover. Mortgage Bonds have broken down technically and are now convincingly beneath their 50-day Moving Average.
There is a lot of room for things to get worse until reaching the next floor of support at 99.28, which is almost 80bp beneath present levels. The 10-year has broken above its 50-day Moving Average and is contending with the 3% psychological level. If that is broken, yields could move back towards 3.25%.
With the breakdown in the charts, start the week with a locking bias.
Source: MBS Highway
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