Recap
Yesterday bonds opened with some great gains, reflecting lower oil prices and an easing of tensions in the Middle East. After that bonds were flat on the day, not continuing to improve like oil prices did. It feels like traders are holding back ahead of the Fed meeting, prepping for a possible rate hike or a hawkish press conference.
Rate outlook for today...
Rate sheets today will be a little bit better than yesterday, as mortgage bonds start the day with small improvement. Today is the first day of the two-day Fed meeting, but tomorrow is when all the action happens at the conclusion of the meeting and in the Fed Chair's press conference. Generally the first day is a 'calm before the storm' day, with little risk of markets moving much. That means reprice risk today is low and it should be a calm day, with military strikes in the Middle East still on pause and markets waiting to hear from the Fed tomorrow.
Discussion