Mortgage Update - Thursday - August 25, 2011
Current trend Direction: Sideways and at bottom of tight trading range
What to do if your getting a loan: Start day carefully Floating - read on
Current Price of FNMA 3.5% Bond: $100.84, 3bp
"When I breeze into that city, people gonna stoop and bow. (Hah!)...Jackson - Johnny Cash
The financial markets are preparing for Fed Chairman Ben Bernanke's big speech in Jackson Hole, Wyoming tomorrow.
Meanwhile - Mortgage Bonds are trading slightly higher, getting a boost from a weaker than expected Initial Jobless Claims report.
Initial Jobless Claims were reported at 417,000, higher than the 400,000 expected. This leading indicator on the health of the labor market shows things remains sick. Small businesses, which do most of the hiring, are not creating jobs. Until there is greater clarity and confidence in government policies - the labor market will continue to slog along.
At 1pm ET, the Treasury will unload $29B in 7-year Notes. Yesterday's 5-year Note auction was mediocre at best - so be on guard as this sizable auction of even longer-term paper could move the market later today.
Technically, the Bond has recouped some of yesterday's sharp losses and at the moment is above important support at the $100.50 level.
We will start the day floating and ideally we would like to carry that stance until we get to hear what Mr. Bernanke says in his important Jackson Hole speech - if the market allows us.
"Yeah, I'm goin' to Jackson, Look out Jackson town."
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