MBS traded sharply lower over the weekend with the 5.5% coupon dropping to 100-11. We've made it back to 100-14 so far this morning.
There are no scheduled releases today, but the rest of the week is action-packed with inflation data, consumer data, and a chance for the Philly Fed Survey and Empire State Survey to show us that their upbeat numbers last time were not an anomaly (let's hope they show us nothing of the sort!).
As we've been trending upward so far this morning, floating with caution is the way to go. So be sure to stay tuned though because if we analyze the broader price trends in recent memory, we see that as the price of the 5.5% hits 101-00, it tends to go down for more than 2 days. Still, "so far so good" this morning (just not from the starting point we would have liked to have had).
Permalink
Read More Blog Posts
Sparkle and Fade brings us to another action-packed week.
Posted: 5/12/2008 8:39:00 AM
Mortgage Bonds sparkled throughout most of last week as rates improved through Thursday. Friday brought rates back up a bit, but so far this morning, that negativity has failed to gain any momentum.
There is no relevant economic data scheduled to be released today, so any movements in mortgage rates will come from other forces such as news headlines, supply and demand issues in the bond market, and "buzz" among traders. As of 11:30AM eastern, we are unchanged from Friday's levels, which, despite the downturn were still quite good through the lens of the last couple weeks, with only mid March being better.
Normally, our advice would be to lock near the top of the market, which historically, Friday morning certainly was. however, because we are seeing the mortgage bond market "hold on" this morning, it may be to your benefit to float until we have more data. So to equivocate a bit: today is a great day to lock in the grand scheme of things, but if the economic data is week this weak, rates could improve even more. In general, your own personal level of bearishness on the economy should be your guide in your decision-making process. The weaker you think economy will be and the more moderate you think inflation will be, is a stronger sign to float. If you think that the Dow Jones Average coming down to the 12,700 range is temporary and that we will now begin to pull out of the recession, than you would favor locking.
If you are going to be "playing the market," you can usually get a fairly good idea of the direction of mortgage rates by watching the movements of the 10 year treasury, which are free to the public and can be found on any economic news service, but beware that the true indicator of mortgage rates is the Mortgage Backed Security (mortgage bond). That is not available to you except through sites such as this. So an even better gameplan if you are floating, is to check back with this blog (make sure you click over to the professional version if you're looking for price changes) to see if there are any mid-day adjustments to bond pricing that may be affecting mortgage rates.
Related News MortgageNewsDaily.com
Can I Link To This Resource?
The answer is YES. We appreciate links to our resources because
our site has grown mostly by word of mouth. However, it is not
ok to post this copyrighted content on your webiste.
Adding a link to this website is simple. Please follow the instructions
below.
Your link should look like this:
Current Mortgage Rates
The information supplied here has been compiled from various resources
to provide our users interested in learning more about this topic.
These resources may contain advice, opinions, and statements of
various information providers and content providers. MND does not
represent or endorse the accuracy or reliability of any advice,
opinion, statement or other information provided by any information
provider or content provide.
