Yesterday, mortgage backed securities closed lower by about .125 in discount. With the stock market closing higher by almost 400 points and treasuries selling off in a big way, to have mbs only be down a few ticks is a positive day.
I suspect that lenders rate sheets this morning should look very similar to yesterdays rate sheets making par 30 year conventional mortgages anywhere from 4.875% to 5.125%.
There are no impacting economic reports being released today. We do get today the weekly Petroleum status report which reports on petroleum inventories in the US. This report will not have an effect on mbs, but we all drive so it is relevant. This report will cause a movement in the price of oil and gas. The only relevant item today is the 10 year Treasury note auction at 1pm eastern. With the added supply of debt on the market, it could cause pressure on treasuries to move higher in yield which might also cause mbs to follow. Tomorrow we do get some economic data that should move the markets. We have retail sales, jobless claims and business inventories. I will report the numbers tomorrow.
So far this morning, mbs are unchanged from close yesterday. After the big stock market rally yesterday, it will be interesting to see how the Dow does today. If we have another rally, mbs could pay the price resulting in higher mortgage rates. Dow futures were pointing to a positive day, but currently the dow is relatively flat on the day. The yield on the 10 yr treasury is currently at 3.00. I will get back to you after the auction today with an update.