Mortgage Bond Market Analysis - FOMC Minutes

It's Hump Day - that would be Wednesday for you non-camel loving folk.  The FNMA benchmark bond closed up 16 basis points yesterday and is down 22 basis points so far today.  Why?  Oil was down yesterday and it's up today - quite a bit at +5.15% currently.  From a technical standpoint, the bond is right at the overbought line as far as the RSI is concerned and at 102.60, it is 5 basis points above the 1st support level.

The big thing that traders are waiting on is what the Fed minutes will show from the March FOMC meeting.  As the saying goes, the devil is in the details and with four of the 17 members pushing for a rate hike, traders ant to know how the discussions went and how solid the doves are.  Based on Yellen's comments last week, she is not keen on increasing rates at the next meeting and maybe for a while - at least until the global economic outlook improves.  On the home-front, we have seen consistently better jobs data as well as improving manufacturing data.  Consumer confidence is strong but consumer spending is still on the week side.

Tomorrow is Jobless Claims Thursday and Friday brings us wholesale inventories.  It's doubtful that either of these will move the market one way or the other.  Oil will likely continue to be the main driver though we could see some movement this afternoon if traders find any surprises in the minutes.  I'll be back Friday with the final post for the week - in the meantime, you can keep up to the minute with what mortgage rates are doing by installing my app, buyerZapp, by clicking on the link in the upper right hand corner of the blog.  I will issue lock / float alerts depending on breaking news that could impact mortgage bonds one way or the other.  For now, I'd lock ahead of the release of the FOMC Minutes just to be safe.  If you decide to float, keep a close eye on the market so that you can lock quickly if rates do move against you.  Make it a great day.