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Wednesday, May 11, 2016

Mortgage Bond Market Analysis - No Data Hump Day

The good news is that it's Hump day.  There isn't really any bad news but the fact that we have been in a really tight trading range over the last four days shows that traders are tentative to make a move and are looking for some direction.  Friday the FNMA benchmark bond was down 9 basis points.  Monday it was up five.  Tuesday, it was down six and today, so far, it's up 9 basis points.  It looks like we may be establishing a top to our recent run although, with some luck, it could be a bottom to a new run.  We get a little more data tomorrow and Friday so with a bit of luck, maybe we'll see some decisive moves from the bond traders - the hope would be that they BUY bonds pushing prices up and rates down.

Yesterday's data was stronger than expected with the JOLTS numbers coming in at 5.757mil vs 5.431 expected.  This was a bit of a surprise with a number of companies recently announcing some pretty major layoffs and last week's jobs numbers being much weaker than expected.  Wholesale Inventories came in at .1% vs. expectations of -.1%.  This data is on the expansionary side and is a bit negative for pricing.  With no data this morning, the benchmark bond has recovered yesterday's minor losses in spite of the fact that oil is up somewhat strongly for the 2nd day in a row.

Tomorrow we get Jobless Claims (it is Thursday, after all) and the Import Price Index.  Friday brings us the Producer Price Index, Retail Sales, Business Inventories and the University of Michigan Consumer Sentiment Index.  I will continue with my recommendation to float with my caveat - pay close attention to my app on your smartphone (buyerZapp) - if you don't have it, you can download it by clicking on the link in the upper right corner of my blog.  You will want to be ready to act quickly should the market turn against you.  Contact me if I can help you with a mortgage or any questions regarding mortgages / underwriting guidelines - 702-812-1214 or 801-853-8720.  Make it a great day.

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