Monday - July 14, 2014, 11:30am ET

Current Trend Direction: Sideways along support

Float/Lock Bias: Carefully FloatingCurrent Price of FNMA 3.5% Bond: $102.28, -12bp

Better than expected earnings from Citigroup is lifting Stock futures and pressuring the Bond markets lower. There are no economic reports due for release today, but the rest of the week's calendar is full of reports that will cover a broad base of the US economy.

There are no Treasury Bond or Note auctions this week.

Capital Economics reported today that it sees the economic recovery in the nation shifting into "a higher gear" due to household debt falling to more manageable levels and property prices having recovered. The report went on to say that it won't be long until we see the tighter labor market trigger a rise in wage growth and should feed through to higher core inflation. Capital Economics is a leading independent macroeconomic research company. Another great think tank seeing wage based inflation pressures emerging. Inflation is a Bond Killereven if inflation moves just modestly higher, rates will move higher as well. Get your clients to understand this dynamic and take advantage of the rates presently available.

Technically, the 3.5% coupon is resting on support at both the 25 and 50-day Moving Averages. We will continue to carefully float, but any breach below support would trigger an Alert To Lock. Be on guard. Have a great week.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com