Friday, April 25, 2014 - Article by: Joe Shamie - First Choice Loan Services -
Friday - April 25, 2014, 1:30pm ET
Current Trend Direction: Sideways to higher
Float/Lock Bias: Floating
Current Price of FNMA 4.0% Bond: $104.50, +9bp
Bonds are higher, but off the best levels of the session. Renewed tensions in Ukraine is shifting investing dollars from Stocks and into the safe haven of the Bond markets so far today. Additionally, limited selling supply (new originations coming to market) this week coupled with the continued Fed Bond buying (QE3) has pushed the price of the 4% coupon up a nifty 59bp this week.
Ukrainian Prime Minister Yatseniuk has accused Russia of wanting to start WWIII by occupying Ukraine militarily and politically. The PM went on to say that attempts at military conflicts in Ukraine will "lead to a military conflict in Europe." If we want lower rates, a good threat of military conflict will do it.
Looking ahead, next week's economic calendar is packed full of reports that will cover a broad array of the U.S. economy topped off by next Friday's Monthly Employment Report where preliminary estimates are calling for 210K jobs created in April.
Technically, the 4% coupon has broken above all layers of resistance this week, but we need to be on guard, because at the present time the Candle on the chart is a Gravestone Doji. And as you can imagine the word gravestone carries a negative connotation. Seeing the appearance of a Gravestone Doji, after this weeks healthy gains could be an early signal that the market is undecided on the next directional move. We need to see where the market closes to confirm the Candle, so look to the Closing Technical Signal after the market closes.
Have a great weekend!
Joe Shamie NMLS # 241432
First Choice Loan Services NMLS # 210764
First Choice Bank NMLS# 177877
Didn't find the answer you wanted? Ask one of your own.