Mortgage bonds opened flat and sold off after 8:00 AM ET. UMBS 5.5 is at 98.92, down 17 basis points, and the 10-year Treasury is up 4.8 basis points to 4.761% — month-end positioning, not new data.

Bonds were a touch stronger at the open and then reversed hard just after 8:00 AM ET. As of 10:13 AM ET, UMBS 5.5 — the coupon closest to today's rate sheets — is at 98.92, down 17 basis points from Friday's 99.09 close, with a session low of 98.90. UMBS 6.0 is at 101.06, down 8. The 10-year Treasury is at 4.761%, up 4.8 basis points, and the 30-year Treasury is up 5.8 to 5.263%.

The shape of the move says more than the size of it. The 2-year Treasury is actually down slightly, at 4.335%, while the 10-year is up nearly 5 basis points. That is the yield curve steepening, not the market repricing what the Fed does next. There is no economic data on today's calendar and no headline that accounts for it. Month-end positioning is the most likely driver: bond portfolios rebalance on the last trading day of the month, and those flows can push prices around without saying anything about where rates go from here.

That distinction matters for your lock decision. Thursday's selloff after Warsh's Jackson Hole speech was real repricing — the market changed its mind about the Fed, and it stuck. Today's move is mechanical, and mechanical moves often unwind. But it is still a worse tape than Friday's close, and today's sheets are being priced off it. Friday's national average finished at 6.81%, a three-week high, and this morning starts from there and slightly worse.

If you are floating and you have room to wait, month-end distortion is one of the better reasons to wait — the flows end when the month does. If you are closing inside the next week or two, you do not have the luxury of that argument, and an early quote today is likely to be the better one again. The next real catalyst is the jobs report on Friday, September 4. That one moves rates on fundamentals, not on the calendar.

— David Burson, NetRate Mortgage