Mortgage Rates Following 10yr Treasury

Mortgage rates are continuing to get better as we saw again the same pattern from yesterday where the MBS have gotten better and the 10yr closed at 2.24%.  US Treasury sold $12B of 30yr bonds this afternoon, and like yesterday the auction was not well bid but also like yesterday there was no noticeable impact on the markets. However, they seemed to get a boost from Trump's comments on the strength of the US Dollar in the afternoon. 

This afternoon Rex Tillerson and Russia’s Sergei Lavrov, the Russian foreign minister, held rather tense news conference with the Russian bringing up US geo-political failures under the Obama Administration. Overall, the meetings with Putin and Lavrov went well even with the expected mudslinging. Yet as expected there were no new initiatives, but talking is a beginning. Russia playing the victim of US aggression said it worried the US would launch a unilateral attack on North Korea - Russia acting like a country that has been abused by the US war-mongering president.  

Tomorrow is the last trading day until next Monday, as all US markets will be closed including the bond market.  Markets in the UK and Japan will also be closed. Not likely banks will price but these days, I am not going to guarantee it - with most of the world closed for the high holy day, Easter on Sunday.

Tomorrow March PPI, Weekly claims, and mid-month U. of Michigan consumer sentiment index comes out.  Most are saying that there should not be any increases in the tensions with Syria over the next few days, and maybe longer. The US has little to gain by more military missile launches now. From here it will become a protracted move to gain a consensus among nations to affect a regime change in Syria.  Even Russia does not want this to escalate and the US also will not want to move unilaterally - Assad would be a complete maniac to launch another chemical attack now.

In summary, if you can tolerate some risk and if you would not lose sleep over the idea of losing some ground in exchange for seeing how this move pans out, then it could make sense to wait until next week.  Several recent levels in 10yr Treasury yields can be used as "stop-loss", as they are highly correlated with mortgage rates and easier to follow on a moment-to-moment basis.  From most to least conservative, 2.28%, 2.33%, and 2.37% are of interest as lines in the sand for locking, depending on when that may be.