Monday May 19, 2014, 10:41 am ET

Current Trend Direction: Sideways

Float/Lock Bias: Cautiously Floating

Current Price of FNMA 4.0% Bond: $105.41, +13bp

Mortgage Bonds are hovering near 2014 highs as Stocks continue to struggle. Equity investors are growing cautious with prices near all-time highs, recent mixed economic data and the Fed slowly leaving the party.

In regards to the mixed bag - just last week we saw weak Retail Sales and lower than expected Consumer Sentiment, solid manufacturing data and higher housing starts, though home prices have been somewhat declining.

There are no economic reports due for release today and week's calendar is on the light side with readings on Weekly Initial Claims along with Existing and New Home Sales. There are no Treasury Note or Bond auctions scheduled for the week.

Wednesday's FOMC minutes from the April 30 meeting will be released at 2pm ET and could offer some volatility, especially if they reveal more details on the Feds tapering process or economic targets.

As we progress through the week, traders will be looking to start the weekend off early as the "Summer of 2014" unofficially begins with the Memorial Day holiday. The Bond markets will be closing early at 2:00pm ET on Friday and all capital markets will be closed on Monday, May 26. Stocks will have a regular session this Friday.

A few market indicators to begin the week - the yield on the 10-Year T Note is at 2.52%, Gold is at $1,301/oz., while Light Sweet Crude Oil is trading at $102.71/barrel.

Technically, the benchmark 4% coupon is hovering near the October highs and is experiencing some difficulty getting above that level. It traded above that level last Thursday, but couldn't sustain the lofty numbers. We are still floating, but very cautiously with prices at tough resistance.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com