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Friday, November 21, 2014

Mortgage Bond Market Analysis - Friday with no economic news edition

TGIF.  Do you have some good plans for the weekend?  My alma mater (the University of Utah) has a basketball game tonight and a football game tomorrow so I'll be enjoying those games in addition to watching my son play in his 8th grade AAU games tomorrow night.

The benchmark bond is having some follow-through from yesterday's solid close; it's currently up 8 basis points (3 basis points off of its high for the day).  There is no economic news today so investors are playing a guessing game about where the economy is headed from here.  From a technical standpoint, the benchmark bond is not overbought but it is trying to break through the 2nd resistance level and I doubt it will do that with any impunity today since there's nothing to drive it - barring some big geopolitical event.  Here's the chart:

There is no data released on Monday but Tuesday and Wednesday both have a full plate (reference to Thanksgiving).  We won't get the jobless claims number on Thursday because of the holiday and then only the Chicago Purchasing Manager's Index is released on Friday - which will be a light trading day (along with Wednesday) anyway.  Light trading days are usually more volatile (almost always more volatile).  The big news to watch out for after the Thanksgiving week is going to be the results of Black Friday.  If the consumers are out in droves spending lots of money for the Christmas season then the benchmark bond (as well as other bonds) will likely sell off (especially if the economic data is good) thinking that this is one more sign of a recovery.

It's time for my ride.  Please like, comment and share and feel free to contact me if I can help with anything mortgage-related - 702-812-1214.  Make it a great weekend.

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