Florida Mortgage Daily – Morning Report

by Florida's #1 Mortgage Planner on March 11, 2009

Locking Stance: LOCKING    Mortgage Bonds: –6bp

Mortgage backed securities look worse than they are as we had the monthly bond coupon rollover.  However, the real problem is that they are currently trading below their 25-day moving average and that could result in the resumption of the prior downtrend if they fail to break back above this level.

MBA Purchase Applications was released this morning and was no surprise to see mortgage applications rise for both purchase and refinances with mortgage rates having ticked down slightly last week.  We have Crude Inventories scheduled to be released at 10:30, but the main event for today will be this afternoon’s 10-year Treasury Note Auction.  The added supply could pressure MBS pricing lower.  The direction stocks move will also be a driving force behind today’s price movements.

On the technical side of things, the picture is turning ugly again, though all hopes are not lost yet.  Mortgage bonds are below their 25-day moving average and a 100% retracement could occur.  We did see a negative stochastic crossover and with their levels being just below the overbought spectrum, a move towards their prior support may very well occur.  The picture remains unclear as I have said before, and we could be seeing a sideways pattern developing or a continuation of the prior downtrend.  As the pattern solidifies, I will be providing its details.

What does this mean for Florida Mortgage Rates?  The short term picture remains unfavorable and now the longer term outlook is turning negative once again.  Over the next few trading days, the picture will hopefully solidify and the future of mortgage rates will be revealed.

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