Good Thursday AM,
Bonds are off considerably this morning and this came from two unexpected moves in Europe. First, the ECB raised their rates and second, Germany came out and said they are highly concerned about inflation. The news here in the US was more bond friendly than not. Keep in mind that MBS has been in a trading range for several days and it should be expected to move up and down within the range. We have a very strong resistance line we touched upon and when price bumps into resistance it pulls back and then goes down and tests the support below.
If you want another reason why rates have risen this year, lets go back to high school economics. Investors this year have withdrawn more than $1.6 billion on net from U.S. core, core-plus, and mortgage bond funds combined, according to data compiled by Refinitiv Lipper through Jan. 26.
Please remain safe and healthy, make today great!