Wednesday - May 21, 2014, 11:15am ET

Current Trend Direction: Sideways to lower

Float/Lock Bias: Floating

Current Price of FNMA 4.0% Bond: $105.44, -6bp

Mortgage Bonds are slightly lower, but remain in a holding pattern as the 4% coupon has traded sideways for the past five trading days. Choppy activity in the Stock markets have supported Mortgage Bonds prices for the past two weeks, but tough resistance levels seen from last October continue to cap prices.

There were no economic reports due for release today and there was little geo-political news hitting the wires.

Later this afternoon at 2:00pm ET, the minutes from the April 30 Federal Open Market Committee meeting will be released and could offer some volatility, especially if they reveal additional details regarding tapering of the Fed's massive Bond buying program. Look to the Market News section at that time for the headlines and market reaction.

Despite being in the midst of the spring buying season, the Mortgage Bankers Association's Purchase Index decreased by 3% in the latest week as Americans grow concerned over both job and wage growth, along with a somewhat slowing economy. The Market Composite Index, a measure of total loan application volume, saw a meager 0.9% increase while the refinance index gained 4%. The MBA said that refinance volume is down 65% from last year's pace, purchase volume down 10%.

Technically, as mentioned, the 4% coupon is in a sideways trading pattern and near the October highs. We will continue to float, but very carefully, as we await the release of the Fed minutes. As always, 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