The impetus that got things going this morning is...(drum roll, please)...wait for it...GREECE. In a letter to their creditors, Greece is showing signs of acquiescing by saying they are willing to make some concessions. This increases the hope for a resolution and stability and decreases the need for the "flight to quality / safety." Currently the benchmark mortgage bonds are down 39 basis points for the FNMA and 24 points for the GNMA (FHA and VA). The last couple of days, the FNMA benchmark bond tested the 2nd level of resistance of 102.92 and was stymied each time. At its current price of 102.53, it is now 15 basis points below the 1st level of resistance. The RSI is also getting close to being oversold but that matters much less than the situation in Greece and the economic data points. Here's a look at the chart:
Tomorrow will bring the unemployment rate (a day early because of the holiday) and weekly jobless claims. I'm guessing it will also bring non-farm payrolls (which would also be a day early) but I haven't yet confirmed that. Either way, these are more reports that could help continue today's sell-off. If you haven't locked, you may want to ahead of tomorrow's data. I will be on a short family vacation beginning tomorrow for my in-laws' 50th wedding anniversary so I won't be reporting on the data. Feel free to call me as I will have access to it in my travels - 702-812-1214. Make it a great day and a better holiday weekend. Have a happy and safe 4th of July / Independence Day.
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