Market Down... Low Trading Volume...

This morning the market is down, leading to slightly higher pricing. Currently off 5 ticks on the day, it appears as though these losses are primarily a react to a rise in treasury yields this morning. As the graph demonstrates the mortgage backed securities market is following the guidance of the ten year treasury... if we could invert the treasury graph and stick it right on top of our mortgage backed securities graph, they would be close to one and the same. Clearly this is not coincidence, in fact this is quite common.

If it's any consolation trading volume this morning is incredibly light. My gut tells me it is going to be a low volume day. Hopefully we see investors return to our market tomorrow, take a look at current pricing and begin buying. This is the type of support we could use right now for these low rates.

I anticipate lenders will hedge against the market in lieu of these losses this morning. Unless we see our market recover today, expect banks to price worse tomorrow morning.