Market update

Mortgage Bonds are trading higher as the debt problems in Europe continue to linger, now in its third year and far from a resolution.

Inflation numbers in December were reported relatively tame today and the data is helping to support the Bond markets. Personal Incomes rose, while Personal Spending fell in December. The fall in spending helped to lift household savings.

Both the fundamental (news) and technical trends are supportive for higher Bond prices, so for now, I will continue to recommend a Floating bias. Just remember, that Mortgage Bond prices are at all-time highs and markets don't go straight up or straight down, so I am very cautious at present levels. If anything changes, I will get back to you.

Leonard Winslow
Direct: 434-760-2580

943 Glenwood Station Lane, Suite 200

Charlottesville, Va. 22901
leonard.winslow@newamerican.com
web: www.newamerican.com/leonard.winslow

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