Monday - July 7, 2014, 11:05am ET

Current Trend Direction: Lower, stabilizing

Float/Lock Bias: Cautiously FloatingCurrent Price of FNMA 3.5% Bond: $102.12, +9bp

After last week's slide due to better than expected data culminating with a strong jobs report, Mortgage Bonds are trying to stabilize.

This week's economic calendar is light with just Weekly Initial Jobless Claims being reported on Thursday. But the markets will have Wednesdays release of the June FOMC minutes to trade on.

The Minutes should be interesting. Wage Growth is starting to perk up and that carries inflation concerns. We will also get to hear their thoughts on GDP after a very negative 1st Quarter reading.

Inflation and better economic conditions are reasons for the Fed to hike rates and this morning Goldman Sachs said the Fed will begin to raise the Fed Funds Rate in the 3rd quarter of 2015 instead of its original forecast of the first 3 months of 2016. Stocks didnt like this or any talk around taking the punch bowl away and as a result, are trading lower.

Technically, both the 25 and 50-day Moving Averages, which were once support, now become resistance. We are floating as Mortgage Bonds attempt to stabilize after Fridays Jobs Report hit.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com