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Tuesday, September 23, 2014

Mortgage Bond Market Analysis

Not much happening in the mortgage bond market this morning with little news on the economic front - the Richmond Fed Manufacturing Index came in at 14 vs. expectations of 12, this isn't a market mover.  We are seeing a bit of follow through from yesterday; the benchmark bond was up 17 on the day at its highest so far and is currently up 9 basis points.  The key thing to watch is where the benchmark bond closes; it is currently 3 basis points above the 1st level of resistance and if it closes above this resistance level, it could be a sign that investors might have confidence to push it even higher with rates moving lower as a result.  Here is the current chart:

Economic News on the docket:  Tomorrow we have new home sales numbers which typically isn't a rate mover but a solid number could have a negative impact.  Thursday we will get the initial and continuing jobless claims and these are the most closely watched numbers of the week (except for the first Friday of the month which brings the employment report) and could impact rates one way or another if there is a surprise.  Also on Thursday are the Durable Goods Orders which gives us a look into what consumers are doing relative to buying big ticket items.  We finish off the week with GDP and Michigan's Consumer Sentiment Index.

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