After a bumpy morning, Mortgage Backed Securities are on the rise again. The only relevant reports coming out today is the Fed's Beige Book and factory orders. Factory orders came in well above expectations(this is good news for stocks, which is usually bad news for mbs), but it appears investors are not interested which is not surprising since they also did not pay attention to the headline inflation reports of late. The Beige Book is a survey of key businessmen, economists and market experts that summarizes our economic conditions. Historically this report is not much of a market mover and should repeat this today.
It appears that our direction will be dictated by the stock market, barring a huge rally, floating does seem in order. All indicators are somewhat in our favor as oil is dropping again and the dollar is at a 7 month high compared to the Euro, both of these will help inflation to continue to moderate. If you are closing soon, you can take the gains of the last few days and lock your rate. If you are several weeks away from closing, floating could pay off. But as always, it would be better to lock when you should have floated, then it is to be floating when you should have locked.
We will get back to you if we see the market move in the wrong direction, but as for me, I am in the pool.