Mortgage Market Comment

Mortgage Bonds are trading lower this morning after the Producer Price Index came in more than double expectations, prompting fears of wholesale inflation. We'll get a better read on inflation tomorrow, when the Consumer Price Index is released.
In other news, Retail Sales for last month were reported at the largest monthly increase in three years, due largely to the Cash for Clunkers program. Additionally, the New York State Manufacturing Index climbed to its highest level since late 2007. However, this may indicate a temporary boost for manufacturing, rather than a true uptick in business activity.
Overall, Bonds have rallied back strong after bouncing off of support at the 100-Day Moving Average. I recommend floating for now as I watch to see if support holds.

Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.