Consumer Confidence for April was reported at 57.2, well below expectations of 61 and the lowest reading in 16 years. Within the report, consumer inflation expectations are at an all-time high, meaning that consumers are seeing inflation as a real threat. This inflationary concern within the Consumer Confidence Report is pushing Mortgage Bonds lower. New Home Sales for April were reported at 526,000, just a shade above expectations of 520,000. The inventory of unsold new homes fell slightly to a 10.6 month level from last month's 11.1 reading. This mildly positive report has given Stocks a boost and even more selling pressure on Mortgage Bonds. U.S. single-family homes showed a price decline of 14.1% at the end of the first quarter from a year earlier, according to the Standard & Poor's/Case Shiller national home price index reported on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas fell 2.2% in March from February and dropped 14.4% from March 2007. There are inflation concerns abroad as the European Central Bank, ECB has reported their annual rate of inflation at 3.6%, the fastest pace in almost 16 years. June 1st will mark the 10th anniversary of the ECB and in each of the last 8 years it has failed to bring inflation under an ideal target of 2%. This is very interesting and makes you appreciate the tough job the Fed has in maintaining price stability. If you think as a global bond investor, Bond yields across the globe, may rise further to offset the rise of inflation. Bonds have drifted well below a layer of resistance at the 25, 50 and 100-day Moving Averages. It now appears as though prices are destined to test support at the 200-day MA, about 60bp beneath present levels. I maintain a locking bias. | 
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