Monday Morning Economic Update!
Stocks are higher and Mortgage Bonds are flat so far this morning. It’s a quiet news day, but there is a ton of housing data due for release this week. Tomorrow the FHFA House Price Index and Case-Shiller Home Price Index will be reported, Wednesday brings Mortgage Apps and New Home Sales, and Friday Pending Home Sales will be released.
It would not surprise us to see the housing data come out soft, especially due to the weather.
And speaking of the weather, Janet Yellen’s February 13th testimony in from the Senate will be rescheduled for Thursday, due to weather conditions. We don’t expect any new surprises, especially after her 6+ hour testimony in from the House.
Mortgage Bonds are being squeezed in a tight range between support at the 38.2% Retracement level of 104.09 and overhead resistance at the 200-day Moving Average. Much of the direction of Bonds will depend on Stocks. The S&P 500 is forming a “cup and handle” pattern, which is usually a bullish signal. We will give it some time to see if it develops, but we should be on guard. If Stocks start breaking out and break through all-time highs, it will be an accelerated push higher and be a drag on bonds.