Monday, May 9, 2011

Interesting week ahead

Good morning and happy Monday to all the Insighters...

Well this week has some light (non market driving) news until the end that will likely cause some movement dictated by the results.
Thu has PPI (producer price index) numbers released and Fri is CPI (consumer price index). If these are in line with expectations we will likely not see much change to our current trading levels. However, if there is any significant unexpected results we could see a sharp drive either direction.
Last week the FNMA 4.5 coupon closed at 103.47 its highest trading of 2011. Today brought us a small gap down loss of -6bps but has since retraced those losses and puts us in positive territory at +9bps keeping us at 103.5 that I called for last week.
We have seen a nice steady few weeks of gains so do not be surprised if we see some sell off from profit takers and between now and Wed eve I dont see a whole lot of room for upside.
Thur and Fri will be driven by PPI & CPI.

Lock advice...
If closing in 7-10 days  LOCK too much risk out there if PPI & CPI come in strong
If closing in 14+ (float cautiously/lock) I give this as mixed as it truly is a coin toss and either decision is OK if Wed approaches and we have another 20bps in gains then LOCK and protect your pipeline and clients

Make it a great week

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