It's Tuesday morning after a long weekend and the bond market is off to a lethargic start to the week. After closing down 46 basis points on Friday, the FNMA benchmark bond is trading in a tight range this morning and is currently down 3 basis points. At 102.29, it's 17 basis points below the first level of resistance and 29 basis points above the first support level. The RSI is just above the midpoint between overbought and oversold so that's not a factor at this point. As for economic data this morning, the NY Empire Manufacturing Index came in at -16.64 (another weak manufacturing reading) vs. expectations of -9.9 and previous of -19.4 - so at least it was a bit better than the previous reading. The NAHB was good with a reading of 58 albeit below expectations of 60 and the previous reading of 61.
Everything is still about oil and four producers have agreed on a freeze but objected to it. If oil moves higher, that could help the stock market and if we can get some bit of a true economic recovery with jobs and consumer spending, then there might be a real reason for the Fed to raise rates. For now, Nobel Lauriate Maskin doesn't think there is any reason for the Fed to raise rates; check out the article here: the Fed shouldn't be raising rates.
Tomorrow we get the PPI which I think will be tame as far as inflation is concerned. We also get Housing Starts, Building Permits, Industrial Production and Capacity Utilization in the morning along with the FOMC minutes in the afternoon. I don't think any of these will be big market movers but I would still lock if you have a loan process just because there's too much risk without enough reward to float. I hope your weekend was great and your week ahead will be fabulous I'm available if you or a friend / client has questions about mortgages or needs a pre-approval: 702-812-1214, 801-853-8720 or jed.wunderli@noblehomeloans.com.
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