Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on November 5, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +44bp

Mortgage bonds edged up slightly since my last report, but remain about the top of their trading range and were unable to mount much in the way of further rallying beyond this morning’s jump.

Announcements of job cuts during October beat last years by 79%.  Couple that with this morning’s ADP Employment Report and we can see why traders rallied at the opening as recessionary fears abound.  However, they were unable to break through the ceiling of the trading range.  With the news, the consensus is an expected report of a loss of 200,000 jobs and the Unemployment Rate to jump to 6.3%.

LIBOR is still dropping slowly, but remains considerably higher than its typical range above the Fed Funds Rate.  Chances are that as the Bank of England cuts rates further, the LIBOR will continue its decline.

The Treasury Department announced it will auction off $55 billion dollars, mostly of 10-year T-Notes and 30-year Bonds, next week.  The added supply will almost certainly pressure bond prices lower, sending mortgage rates higher.

As the trading day ended, the DJIA lost nearly 500 points and mortgage backed securities were unable to mount any solid rally, failing to break above their trading range and leaving questions about their ability to do so in the coming days.

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