Monday, September 22, 2014 - Article by: Joe Shamie - First Choice Loan Services -
Monday - September 22, 2014 - 9:35am ET
Current Trend Direction: Higher
Float/Lock Bias: Carefully Floating
Current Price of FNMA 4.0% Bond: $105.16, +10bp
After several days of bouncing along the 200-day Moving Average of support, Mortgage Bonds have gapped or opened higher and away from this support level. This is a positive technical signal as it signals that there were more buyers than sellers in the pre-market. We are looking and hoping for a nice upside follow-through in priceswhich means lower rates.
Stocks are taking a breather after recently hitting another record high in the S&P 500 and the Dow.
This week features housing news, beginning today with the 10am release of August Existing Home Sales, but the big news will be the final reading on Q2 GDP on Friday. The second reading of Q2 GDP was 4.2% and estimates are for 4.6%...that would be a pretty big number after the miserable 1st Quarter where a -2.1% was posted.
The Treasury will also be selling a total of $93B in 2, 5 and 7-Year Notes beginning tomorrow and running through Thursday. This supply could weigh on Bonds. But with underlying support at the 200-day MA and the almighty US Dollar continuing to strengthen, US Bonds will likely hold their ground.
Continue to float and lets see if Bonds can build on the positive Gap Open or higher open this morning.
Joe Shamie NMLS # 241432
First Choice Loan Services NMLS # 210764
First Choice Bank NMLS# 177877
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