Wednesday - June 11, 2014, 10:25am ET

Current Trend Direction: Sideways to lower

Advise Your Clients: Carefully FloatingCurrent Price of FNMA 3.5% Bond:$101.88, +16bp

Heavier than usual Fed buying is pushing Mortgage Bond prices modestly higher this morning, while Stock prices are lower. With Equity prices hovering near all-time record highs, investors may be looking to book some profits. There are no economic reports set for release today.

The Treasury will be selling $21B 10-Year Notes today and comes after yesterday's mediocre 3-Year offering. The results will be released at 1:00pm ET.

The Mortgage Bankers Association reported today that its Market Composite Index, a measure of total loan application volume, surged 10.3% in the latest week as borrowers realize that rates are at near year low levels. The refinance index rose index rose 11%, the purchase index was up 9%. Get your clients to consider cashing in on the low rates while they are still available.

Technically, the 3.5% coupon is trading near support at the 50-day Moving Average. With Stock prices lower, we will start the day floating to see if the Bond can stabilize after the recent decline. The auction later may dictate the Bonds next price move.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com