Today brought us the release of 3 economic reports. First, weekly jobless claims came in higher then expected and the 4 week average remains very high, this is MBS positive. Next we had the release of the Philly Fed Index which came in higher then expected. Economists were expecting a reading of -10.0, but the actural number came in at 3.8. A reading under 0(or negative) shows contraction and a positive reading shows expanision. This report is equity positive. The last report released is the Leading Indicators which came in worse then expected which is mbs positive. A large part of this report is the prices paid which came in lower. This signals less inflationary pressure thus a positive for MBS.
It appears that we are going to be moving sideways. All things are pointing to a move higher in mbs pricing which causes yields to drop which results in lower mortgage rates, but it appears investors are in a wait and see mode. The Dow is currently up 160 points, oil is trading around $98 a barrel. If we have any breaking news on financials, that could move this market very quickly and we will be back to post an update. As stated yesterday, we have a very solid ground of support about 8 ticks from current trading, so if we fall more today there is not that far to fall.
So floating appears to be safe but a big tape bomb or headline risk could change that quickly. But we have stated many times, it is better to lock when you should have floated then it is to float when you should have locked. Evaluate your own risk tolerance and if you are happy with the today's rate go ahead and lock. If you can tolerate some risk, there is plenty of room above current pricing for mbs to improve and lower rates.