Wednesday, April 23, 2014 - Article by: Joe Shamie - First Choice Loan Services -
Wednesday - April 23, 2014, 1:25pm ET
Current Trend Direction: Sideways to higher
Float/Lock Bias: FloatingCurrent Price of FNMA 4.0% Bond: $104.31, +22bp
Despite a big rally in the Stock markets this week, Mortgage Bonds have held up relatively well and are trading higher. After last week's sell-off in Mortgage Bonds, lower prices are luring in buyers. And technically support continues to hold for Bonds.
The current recovery is now 59 months old, the average length of all post WWII expansions. The last three recoveries have been much longer; 92 months, 120 months and 73 months respectively. This recovery will also be a very long one. Inflation remains benign, unemployment is still very high, commodity prices are low, and the Fed hopes to keep short term rates near zero for at least 15 more months.
A mentioned earlier, support by way of the 25/100/200 day Moving Averages continues to hold. Float while Bonds remain Happy. But be on guard in case the Treasury auction sours the good vibes.
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