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Thursday, November 20, 2014

Mortgage Bond Market Analysis - week before Thanksgiving edition

Happy Thursday to you.  Data came out today like stuffing out of a turkey (yeah, I love Thanksgiving and can't wait for the dinner).  Existing home sales came in at 5.26m vs. estimates of 5.16 which is bad for the benchmark bond (and rates).  Leading Economic Indicators came in at .9% vs. estimates of .6% and the biggie was the Philly Fed business outlook was 40.8 vs. estimates of 18.3 - all bad for the benchmark bond.

On the flip side, initial jobless claims came in at 291k vs. estimates of 285k.  While the job market isn't where it needs to be, as long as claims are under 300k, that is basically good.  That said, it is weaker than expected and there is still trouble in Europe so that is helping our cause today.  The benchmark bond is currently 14 basis points off its high but is still up 16 basis points from yesterday's close at 103.47 - 1 basis point above the 1st level of resistance.  Here's the chart:

There is no economic data on docket for tomorrow and next week will be a light trading week with the holiday which means that any news, good or bad, will likely be amplified.  It's a great day to lock but there's nothing wrong with floating just as long as you can keep your finger on the pulse and be ready to lock just in case something big happens and the market moves against you.  Please feel free to share your thoughts in the comments section.  Make it a great day.

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