Thursday - February 27, 2014, 10:45 am ET

Current Trend Direction: Sideways

Float/Lock Bias: Carefully FloatingCurrent Price of FNMA 4.0% Bond: $104.81, +9bps

Mortgage Bonds are near unchanged after some mixed economic data hit the wires.

The Labor Department reported that Weekly Initial Jobless Claims rose by 14K in the latest week to 348K versus the 335K expected, a one month high as the job markets continues its up and down pattern. The 4-week moving average, which irons out seasonal abnormalities, was unchanged at 338,250. The market has been choppy lately, especially after the anemic numbers from job creations in December and January. The February jobs report will be released Friday, March 7.

Durable Orders in January fell by 1.0% nearly inline, but when stripping out transportation, Durable rose by 1.1% versus the -0.3% expected. The push pull data has left Mortgage Bonds near unchanged.

Over in housing, RealtyTrac reported that institutional investor home buying hits a 22-month low - investors accounted for 5.2% of all housing sales in January, down from 7.9% in December and down from 8.2% in January 2013. CoreLogic reports that completed foreclosures fell by 19% from January 2013 to January 2014 to 48,000 and are down 11.8% from December to January.

Freddie Mac reported net income of $8.6B in Q4 2013 and a record $48.7B for all of 2013. Freddie sent a dividend payment of $10.4B to the Treasury and when it makes its next payment in March, Freddie will have paid the Treasury about $81.8B in return for the $71.3B in the bailout money received during the financial crisis.

Technically, the 4% coupon is nearing lofty levels, that in the past has caused the Bond to top out and subsequently push lower. We are still floating, but ever so cautiously as we watch the action play out. The Candle on the chart is showing some indecision, seeing this appear after an uptrend is reason to be cautious - stay tuned.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com