Wednesday - November 27, 2013 - 9:42am ET

Current Trend Direction: Stalling at the 50-day MA

Float/Lock Bias: Carefully FloatingCurrent Price of FNMA 4.0% Bond: $104.47, Unchanged

Mortgage Bonds seem to be stalling at current levels as the benchmark 4% coupon continues to trade in a sideways pattern, just below resistance at the 50-day Moving Average.

This morning's economic data had little impact on trading. Weekly Initial Jobless Claims fell by 10K in the latest week to 316K, below the 330K expected. It was the lowest number since the week ended September 28, but seasonal factors during the holiday season could cause the numbers to bounce around making it difficult for the number crunchers to come up with a true reading. Durable Orders for October declined by -2%, inline with estimates, pointing towards slower growth towards the end of the year.

Later this morning we will get the November Chicago PMI (9:45) and the final reading for November Consumer Sentiment (10:00). In addition, the Treasury will be offering $29B 7-Year Notes, which comes after yesterday's average demand for the 5-Year offering.

In a sign that household deleveraging may be over, outstanding household debt grew by $127 billion in Q3 and now stands at $11.28 trillion. While down 11% from the peak of $12.7 trillion set in 2008, after essentially 20 straight quarters of deleveraging, this is great news. Mortgage debt rose by $56 billion, credit card debt by $4 billion, auto loans by $31 billion and student loans by $33 billion.

Trading volumes have been low this week and should be near anemic levels this afternoon as traders escape early to begin the long holiday weekend. We will start the day Floating, but sentiment can quickly reverse in a low volume environment, so be on guard.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com