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Tuesday, August 16, 2016

Mortgage Bond Market Analysis - What's Happening?

Happy Tuesday.  After being away for about a week and a half, I'm back from vacation and trying to get caught up.  So now let me get you caught up on the economic data and how it's impacting the mortgage bond market.  July Industrial Production came in hotter than expected at .7% vs. estimates of .3%.  Capacity Utilization was also a bit stronger than expectations coming in at 75.9% vs. 75.6% expected.  July Housing Starts came in above estimates at 1.211mil vs. estimates of 1.18mil.  The July Headline CPI came in as expected at 0 while the Core CPI MOM was a bit weaker than expected at .1 vs. estimates of .2.  The YOY was also slightly weaker than expected at 2.2% vs. estimates of 2.3%.  The data overall is fairly strong and has caused the FNMA benchmark bond to sell of 29 basis points from its morning high of 103.79.  The RSI is around the 40 mark - 30 is oversold and could be a signal for traders to buy.  The bond is currently 67 basis points off the July 29th high with a downward trend.  I recommend locking if you are in a position to lock.  Tomorrow we get the Fed Minutes - I doubt there will be any surprise there but you never know.  Thursday will bring us the Philly Fed Manufacturing Survey and the Leading Economic Indicators.

As always, I'm happy to help in any way I can so feel free to contact me at or 702-812-1214 or 801-893-1737.  Make it a great day.

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