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Tuesday, October 14, 2014

Mortgage Bond Market Analysis - Sorry for the week off version

It's Tuesday morning and the mortgage bond market is starting the shortened week (it was closed yesterday for Columbus Day) off strong thanks to another big down day in the stock market yesterday.  The yield on the 10-year treasury is well below where the experts thought it would be at this time of year considering the Fed is nearly complete with the tapering of the quantitative easing program and the though of an improved economy.  The fact that the economy hasn't improved nearly as much as most hoped for and that the global economy, especially in Europe, is very week is driving these low rates.  Also helping the benchmark bond is the fact that there's a lot of other global issues with ISIS and Hamas, the issues with Russia, the Ebola virus as well as other things.  Here's the chart:

As you can see in the chart, the benchmark bond has bumped off of both resistance levels this morning and is 12 basis points of its high for the day.  The Relative Strength Index is overbought (and has been since September 25th) so it's hard to think that there is much left, if any, in this great run.  The current price is well above all of the moving averages as well so I would look for some profit taking if nothing else in the near future.

This week's economic data:  Tomorrow we get the PPI (ex-food and energy) and on Thursday we get initial and continuing jobless claims along with capacity utilization, industrial production, Phillie Fed Manufacturing survey, and NAHB Housing Market index.  On Friday we get housing starts, building permits, University of Michigan Consumer Sentiment index and a speech from Janet Yellin.  The data most likely to impact rates one way or the other is the numbers for jobless claims.  I always say "don't be greedy."  We've had some great improvement in the bond market over the last 3 weeks - if you have a loan closing in the near future, I would consider locking - especially before Thursday's data release.

Inspiration:  I had an idea to add this section - don't know if I'll do it every time but I wanted to add a little more to these posts.  I love sports and my main activity to get and stay fit is bike riding.  I also love music - I write and produce in my home studio and I love watching YouTube videos of young musicians.  So the nature of this section will be to either share my accomplishments in the hope of inspiring you or to share something from YouTube or other similar source to provide inspiration which hopefully carries over into your work performance.  For some background I haven't ridden nearly as much over the past two years as I did the previous three.  Last year I rode a total of 1,940 miles - this year I'm just over 2,500 miles so I'm well ahead of last year.  Last month was my biggest month in two years with 540 miles and I'm trying to beat that this month (I missed 4 days at the beginning of the month on a hunting trip and will miss 5 more on a business trip).  I have ridden 335 miles so far and hope to be at 432 after Friday's ride.  I set a personal best time for my 35.58 mile route yesterday with an average speed of 18.8 mph - beating my old time by 1:20 and I followed that up with my 3rd best time this morning on my 25.97 mile route with an average speed of 19.1 mph.  Time to get busy building relationships and helping people finance their homes.  What are your goals and achievements in exercise, music or the business world - or anything else for that matter?  Make it a great week and feel free to call me if I can help with anything mortgage related:  702-812-1214.

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