Wednesday, November 13, 2013 - Article by: Joe Shamie - First Choice Loan Services -
Wednesday - November 13, 2013, 11:25am ET
Current Trend Direction: Slightly higher
Float/Lock Bias:Cautiously FloatingCurrent Price of FNMA 4.0% Bond:$104.19, +25bp
Mortgage Bonds continue to try and stabilize after Friday's big drop on the heels of the better than expected October Jobs Report. Renewed QE tapering fears are hurting Stocks and reason for the bounce higher in Bonds so far today.
Fed Member Dennis "Spider" Lockhart said yesterday that the central bank cannot rule out tapering at the December FOMC meeting. However, a sour December Jobs Report could quickly reverse that notion. We feel that tapering will not begin this year, despite many in the media who say that it could happen in December. Inflation is non-existent and the Labor Force Participation Rate is at 35+ year lows - this puts the Fed in a tough spot to taper now.
There are no major economic reports due for release today and the rest of the week's calendar is light. This afternoon at 1:00pm ET, the results from today's $24B 10-Year Note offering will be released and comes after yesterday's solid demand for the 3-Year paper. As this auction goes, so do Bonds - so be on guard.
We are still floating post Jobs Report as prices continue to rebound off Friday's lows. But don't stray far away from the lock trigger as sentiment can change quickly.
Joe Shamie NMLS # 241432
First Choice Loan Services NMLS # 210764
First Choice Bank NMLS# 177877
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