PPI, producers price index, was released this morning and was tamer than expected at 0.2%. The street was expecting 0.4%, however core PPI (ex food and energy) was hotter 0.4% than expected 0.2%. Stock are reacting negatively to this news on the open and mortgage bonds so far are up 16 bps today. The Bulls won the battle yesterday at the 50 and 100 moving average market, and that is now a level of support technically for the mortgage bond market. Expect slightly better pricing today for the mortgage loan officers out there, the rates however should be the same as yesterday. I recommend a FLOATING position on all loans.
Just a reminder that the FOMC minutes of their last meeting is being release tomorrow at 2pm which I expect to be a market mover.