Cautiously float

Mortgage bonds bounced higher this morning, following a flat line report of July’s Retail Sales number. However, June’s report was revised 0.2% higher. Overall, the news was taken well by bond investors, pressuring the APR of mortgage interest rates lower. This is a great sign, as mortgage bonds were at high risk of dropping from levels they closed at yesterday.

Wholesale Inflation was also below expectations, reversing the trend of rising prices on the wholesale level.

Given the strength in the market, we can carefully float at the moment. However, be prepared to lock should the course reverse.