Florida Mortgage Daily – Daily Guidance on Florida Mortgage Rates

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +25bp

Mortgage backed securities are back on the upswing as the Treasury Department announced a mere $65B in upcoming auctions, down from $104B prior.  With the diminished supply entering the markets next week, traders feel more confident that the added supply can be easily absorbed into the markets without diluting prices.  This marks yet another plus for lower mortgage rates.

What does this mean for Florida Mortgage Rates?  Mortgage rates have improved slightly since my prior report and things are looking a little better.  There is still some uncertainty that remains, but the outlook remains favorable for lower mortgage rates.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: LOCKING    Mortgage Bonds: +12bp

Mortgage backed securities made a turn around yesterday and ended the day higher, having reversed the morning’s losses.  Today, they are reversing again as they approach, if not touch, overhead resistance.  The move higher is sparked by a favorable Jobs Jamboree, which I will get into in a moment, but with the show weakness and the approach Treasury Announcement surrounding the 30-year T-Bond, MBS pricing could drop from here.

OK, as for the Jobs Jamboree, here is a quick rundown of the numbers, along with the Jobless Claims report for this week…

As you can see, in general the reports were favorable, though a couple of minor details were not.  The Unemployment Rate coming in lower than expected and the slightly better than expected Jobless Claims were the negatives, with the remainder being favorable.  As I mentioned, though, mortgage backed securities are not moving higher and with the Treasury Announcements soon to come, a drop in mortgage bond pricing can be expected.

What does this mean for Florida Mortgage Rates?  Mortgage appear to be drifting slightly higher today.  The overall outlook remains favorable at the moment.

Note:  I was checking on the website and noticed that June 29’s post did not appear and I initially had problems with yesterday’s.  I am now checking to ensure posts do appear after being written as part of the quality control on this site due to the importance of its material.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds: –19bp

Mortgage Backed Securities held up after their initial drop, ending the day down 28 basis points.  While they opened lower today, they have dropped to test their 200-day moving average as was expected this week, and that level is holding well as support at this time, making the future look optimistic for lower mortgage rates.

Coming to the aide of MBS pricing is the data that was released this morning.  The ADP Employment Report came in weaker than expected, but traders have not reacted significantly on the news.  Keep in mind that this report is not a very accurate forecast for the monthly Jobs Jamboree, and since the jobs data is being released tomorrow, traders probably feel like they may as well wait for the “real” data.  The ISM Manufacturing Index came in basically inline with expectations.  The numbers came in at 44.8, slightly better then expectations of 44.6, but more significantly is the fact that they are up from 42.8 last month.  The data shows the manufacturing sector is still shrinking, but it is approaching “middle ground” and certainly not shrinking as much as before.  Still to come is Crude Inventories, but that data will not likely have much of an impact on mortgage bonds.

What does this mean for Florida Mortgage Rates?  Currently, it appears mortgage rates will remain steady, and may even begin to move lower again by tomorrow.  The outlook remains uncertain, but the future is looking more favorable for lower mortgage rates.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: LOCKING     Mortgage Bonds: –38bp

Mortgage backed securities held up pretty good yesterday, though there was a brief “scare”.  They ended the day up around 28 basis points.  Today marks the beginning of the barrage of data that will bring extreme volatility in all likelihood due to the shortened trading week, which will end with the monthly Jobs Jamboree and will put the 200-day moving average to the test.

This morning, we saw that the Case-Schiller Housing Price Index at a lackluster –18.12% versus –18.16%.  Previous reports have been missing lower and we now see an increase in the numbers on both the 10 and the 20 composites.  In about 15 minutes, we will see the Chicago PMI hit the airwaves which may add to the pressures if it comes in above expectations, and another 15 minutes after that, we will see Consumer Confidence released.  This afternoon also holds several Fed speeches, so there words may affect the markets as well, adding to the volatility.

What does this mean for Florida Mortgage Rates?  Expect mortgage rates to tick higher today, with a chance of further deterioration possible as the day goes on.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: –9bp

Mortgage backed securities rallied considerably after punching through their double resistance of the 25-day and 200-day moving averages.  With that hole created, there was not much to stop them, though we will likely see a retest of those levels in the coming days as part of a retracement, or correction.

Data today was mixed, with the Personal Consumption Expenditures Index, the Fed’s favorite gauge on inflation, showing inflation remaining under control.  Both the overall PCE and the Core PCE came in at 0.1%, with the core level coming in below expectations.  Personal Spending was inline with expectations at 0.3%, but Personal Income rose 1.4%, well above the consensus of 0.4%.  Consumer Sentiment was released just over an hour ago and it beat expectations, coming in at 70.8 versus estimates of 69.7.  Inflation indications weigh heavier than the rest, so overall mortgage bonds will benefit.

What does this mean for Florida Mortgage Rates?  Mortgage rates should hold fairly steady today, and likely into the next week.  The longer term outlook has finally changed for the better, though things can change quickly and caution must remain in this volatile market.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +47bp

Mortgage backed securities have broken through their double resistance and look to make some further gains.  The 7-year Treasury Note Auction results have now made the airwaves and MBS prices are reacting positively to the news.  The auction results had a strong bid/cover ratio and the yield awarded was below expectations.  With the intensity of demand for Treasuries this week, questions surrounding whether official buying is involved have risen.  At this point, floating offers an opportunity and let’s hope it will stick through tomorrow’s PCE report.

What does it mean for Florida Mortgage Rates?  Mortgage rates look to tick lower at the moment, at least for the short-term.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: LOCKING    Mortgage Bonds: +22bp

Mortgage backed securities ended the day fairly well, flat-lining after the initial fall post-Fed.  Today marks the fourth straight day that MBS pricing has been attacking their 200-day moving average, which is now above the 25-day moving average.  That’s right, we now have a negative moving average crossover, along with the double ceiling of resistance, though MBS pricing is currently above the “waterline” at the moment.  If mortgage bonds can close above this level in the coming days, lower mortgage rates will be seen.  If not, mortgage rates could jump again quickly.

Data plays for today are not going to make a huge difference in all likelihood today as traders eyes become focused on tomorrow’s PCE data.  However, we have already seen GDP data released.  Real GDP came in above expectations slightly, with a showing of –5.5% versus expectations of –5.7%.  The GDP Price Index was inline with expectations at 2.8%.  Jobless Claims were also released and exceeded expectations, coming in at 627K versus 600K, and that is giving mortgage backed securities their strength today.  We will have the 7-year T-Note Auction results released this afternoon (1:00 ET), which will weigh on the markets as well.  Yesterday’s auction went better than expected and today’s auction may give MBS pricing the needed boost, or drop their prices yet again.

Looking at the charts, there are mixed indications, though the next day or two can will prove either profitable or costly for those that float.  With stochastics moving to the high side of the spectrum, toward overbought, and the fact MBS pricing has failed to break and hold above their 200-day moving average for the last three days, I am erring on the side of caution and holding the locking stance for now.

What does this mean for Florida Mortgage Rates?  Expect mortgage rates to hold fairly steady today, though this afternoon’s Treasury Auction may change that.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance:  LOCKING    Mortgage Bonds:  -9bp

Mortgage backed securities have tested their 200-day moving average several times again today, and even were pushed lower again.  Overall though, they have been holding about flat with their latest attempt to break through the double resistance coming just before the Fed’s Policy Statement, having pushed higher to being up 18 basis points.  However, since the FOMC Meeting Announcement, MBS prices have swung lower and likely will continue that direction.

And speaking of the FOMC Meeting Announcement, here is a quick rundown, though I will dissect it more later today over at Florida Mortgage Report.  The Fed’s decided to keep the Fed Funds Rate stable at 0.00-0.25%, though I think some traders would have liked to see an increase still.  While this was the consensus, mortgage backed securities traders are not too happy and are reflecting it in the MBS prices.  Check back later at Florida Mortgage Report for a complete rundown on the Policy Statement.

What does this mean for Florida Mortgage Rates?  Well, it appears that mortgage rates will be back on the rise, at least for the short-term outlook.  Things change quickly, and I will post if anything significant changes.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: LOCKING    Mortgage Bonds: +6bp

Mortgage backed securities attacked their 200-day moving average several times yesterday, each time being beaten back.  At one point, MBS pricing crashed, causing many to rush to lock, which may or may not be a bad thing, so long as they locked you before the re-pricing started.  By the time the trading day closed, mortgage bonds closed up 3 basis points, considerably higher than the lows they reached.

Today presents a very interesting day to say the least.  We have a fairly decent stochastic indication, though in the middle ground, but we also have a more important indication in my opinion.  Since mortgage backed securities have failed to break through their 200-day moving average, their 25-day moving average has been coming down to meet them and is now sitting just above the 200-day MA, thus creating a double layer of resistance.  The bottom line is that MBS pricing will need a major catalyst to break this “thick ceiling” in order to bring lower mortgage rates, and that may or may not happen today, as we the day has just begun.

Durable Goods Orders were released and they beat expectations, coming in at 1.8% versus the consensus of –0.5%.  Removing transportation from the list and we still have a 1.1% gain, up from last month’s 0.8%.  That will put some pressure on MBS pricing today, though most traders will be awaiting this afternoon’s excitement, the FOMC Meeting Announcement and the 5-year T-Note Auction results.  Other data about to be released includes New Home Sales and Crude Inventories and this morning’s MBA Purchase Applications showed purchase applications 7 percent and even refinances were up 6%.

What does this mean for Florida Mortgage Rates?  Mortgage rates will hold steady, if not tick slightly higher, in the morning.  In the afternoon, things will likely change very quickly, for better or worse.  I prefer locking in these situations based on the charts, though a dramatic event may bring rates lower.

Tags: Florida Mortgage Rates, MBS Commentary

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +3bp

Mortgage backed securities ended the day up 38 basis points yesterday and were unsuccessful in their repeated attempts to break through their 200-day moving average.  While recovering from a morning drop, so far today’s current battle has yielded the same results.  There are mixed signals and caution must remain, though signs are turning a little more positive.

Data today is scarce, with all eyes turning to the FOMC Meeting and awaiting their decision tomorrow.  Existing Home Sales was released a little while ago and was below expectations bringing more sentiment that the Fed will have to do more to drive mortgage rates lower to stimulate the housing market.  Existing Home Sales was reported at 4.770M (versus 4.850M), and that was a monthly change of 2.4%, which brings the annual rate to –3.6%. 

There are some Treasury Auctions today, most notably the 2-year T-Note, which could impact the markets slightly.  Yesterday’s Treasury Auctions did not go as well as the prior ones, with the bid/cover ratios dropping and yields climbing from the prior auctions.  If the auctions do not go well today, the markets may back off and a change in stance may be warranted.

What does this mean for Florida Mortgage Rates?  Mortgage rates are holding steady for now, but that picture may change in the next day or two.

Tags: Florida Mortgage Rates, MBS Commentary