Monday - November 4, 2013, 2:20 pm ET

Current Trend Direction: Sideways to slightly lower

Float/Lock Bias:FloatingCurrent Price of FNMA 4.0% Bond: $105.25, +22bp

Mortgage Bonds begin the week slightly higher and smack at the important 200-day MA. There is little to move the markets so far today, however, this week features the October Jobs Report on Friday.

A weak jobs report could be already factored into Mortgage Bond prices as estimates are calling for 100K jobs created, down from the 148K created in September while the Unemployment Rate is expected to increase from 7.2% to 7.3%.With prices fighting to break convincingly above the 200-day MA, upside gains may be limited. And abetter than expected number will most likely send Bond prices lower and away from the 200-day in a hurry.

St. Louis Fed President James "Raging Bull" Bullard said on CNBC this morning that there has been "substantial progress" in the labor markets, but with inflation running below its 2% target, the Fed could be patient on scaling back its Bond buying program. We agree on the inflation, as it has moderated even further, providing air cover for the Fed to keep on buying Bonds. But on the substantial progress in jobs, yes we have made progress from where we were 5 years ago, but that was 5 years ago. We see the labor market slogging along creating 150,000 jobs a month, not nearly enough to put a true dent in the unemployment rate...hence the reason why the Labor Force Participation Rate, a better gauge of labor market health, sits at a 35-year low.

Float and let's all hope prices can claw back above the 200-day MA in a big way. Failure to do so will mean you will have to lock up everything.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com