Florida Mortgage Market – Morning Update

by Florida's #1 Mortgage Planner on May 28, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -34bp

Mortgage backed securities ended the day down around 34bp yesterday, much as I expected.  Today, more of the same is in store, though the 200-day moving average is holding up (for now).

Durable Goods beat expectations, actually crushed expectations.  Even though the numbers were still negative, a reading of -0.5% versus the expected -1.5% has sent bonds crashing to the floor.  They have bounced off their 200-day moving average, so there is still a glimmer of hope.  The remaining question will be when that glimmer gets destroyed (PCE maybe?)

Keep in mind that inflation is the arch enemy of bonds and you can see inflation all around us.  Don’t get fooled by the data that has been coming out, just look at what is happening to your own wallet.  Gas prices going up by 9% in one month will certainly boost inflation, and bonds will suffer.

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