Locking bias

Mortgage bonds continue to trade in a very tight range this morning, as they look to be making a breakout in one direction or another.  As we talked
about in yesterday’s update, bonds are at a point where they will be forced to make a decision here quickly.  So far this morning, they touched
the top of the trading range and were quickly pushed back lower.  The reality is that bonds will not likely be able to make a break higher, if
that is the direction they ultimately decide, until we learn the results of tomorrow’s Consumer Price Index report.  If it shows inflation below
expected levels, that could provide the catalyst needed to help improve mortgage rates. 

Weekly Unemployment Claims for the week ending 4/11/2015 came in at 294,000.  This was an increase of 12,000 from the week prior’s upwardly revised
282,000, but it still is a decent report.  Because the market was expecting 280,000, there was a hint of disappointment at the release of the
report.  Next week’s report will be the one used by the Bureau of Labor Statistics as well as ADP for computing job growth figures for April. 
Therefore, that report will be much more significant to the market.

With bonds still unable to break above overhead resistance, the safe play continues to be locking.  We believe that the near term direction of mortgage
rates will be decided by tomorrow morning and at this point, either direction is possible.  In times without a clear direction set in the market,
be careful if you choose to float.  Watch the markets closely and be ready to secure a rate if the ultimate direction is negative to the bond
market.