Wednesday, March 12, 2014 - Article by: Joe Shamie - First Choice Loan Services -
Wednesday - March 12, 2014, 10:55am ET
Current Trend Direction: Sideways, near support at the 200-day Moving Average
Float/Lock Bias: Carefully Floating
Current Price of FNMA 4.0% Bond: $104.12 +19bp
Fears of an economic slowdown in China are supporting the Bond markets in the early going, and in turn, pushing Stocks lower. There are no economic reports to influence trading today, but the Treasury will be selling $21B 10-Year Notes, results at 1:00pm ET.
China reported that overseas shipments declined by 18.1% in February from a year earlier, the largest drop since August 2009. The feeling is that falling Chinese exports could be seen as a sign of a slowing global economy. Growth is expected at 7.5% this year in China, lower than the 8% that was originally forecasted.
In Fed news, Janet Yellen's first FOMC meeting in her reign as Fed Chair will be next Wednesday and will focus on how to keep interest rates low without any major disruptions in the financial markets. Policymakers are expected to scrap the 6.5% unemployment rate threshold and may likely offer new language on when tighter monetary policy may come.
The Mortgage Bankers Association's Market Composite Index, a measure of total loan application volume, fell by 2.1% in the latest week, after rising by 9.4% in the previous week. The refinance index fell by 3%, while the purchase index was up 1%.
Technically, the 4% coupon has seen the 50-day Moving Average cross above the 200-day for the first time in over 2 years. This positive technical signal called a "Golden Cross" could portend better prices ahead. We will continue to carefully float. As always, stay tuned throughout the session for any sudden changes.
Joe Shamie NMLS # 241432
First Choice Loan Services NMLS # 210764
First Choice Bank NMLS# 177877
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