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Wednesday, July 20, 2016

Mortgage Bond Market Analysis - About Face

Happy Hump Day.  Since my birthday, July 5th, the FNMA benchmark bond has sold off 75 basis points which translates into an uptick in rates by about .125% in rate and .25 points in fee as an approximation.  Things are starting to normalize a bit and we got some good economic data last week.  With the sell-off, the RSI has fallen to below the over-sold threshold.  Tomorrow we get the ECB Policy Statement which should be interesting considering the recent Brexit.  This could be a market mover but my guess is that we will see very little in terms of dynamics and that the content will be more along the lines of how progress is being made and that England will remain a big part of Europe's economy and success - that's just my guess.  If this is what we hear then I expect the markets to trade in business-as-usual fashion.

If there is any concern in the ECB statement, then there would likely be a bit of a move to safe-haven investments (bonds) and we would then see bond prices increase (and rates decrease) as demand for bonds and the resultant buying pushes those prices higher.

Admittedly, I have been a bit absent from blogging lately as I have had a number of family activities that have kept me from it and there are a few more family travel plans that will keep me on the more inactive side of blogging.  That said, there are a couple of ways to stay on top of rates and to know whether you should lock or float:  1) download buyerZapp by clicking on the link in the upper right-hand corner of my blog, or 2) call or email me and I will be happy to give you my lock / float recommendation (702-812-1214, 801-893-1737 or  As for today, I recommend floating but staying close to the app in case any of tomorrow's data or the ECB statement causes investors to sell off.  I'm happy to help in any way I can.  Make today great. 

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