Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on November 6, 2008

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  -3bp

Mortgage backed securities managed to rebound back to nearly flat after their dismal opening.  That is good news going into tomorrow’s jobs data, as I eluded to in the midday report.  If MBS can manage a rally off the data, we could break out of the trading range and send mortgage rates lower, so hold on and cross your fingers.

A dismal sales outlook is partly to blame for stocks failures today and that means money flowed over into bonds as they day moved on.  The DJIA had another day of being down nearly 500 points, showing the money flow fairly clearly.  News of the overseas central banks cutting their rates, particularly the Bank of England’s aggressive cut, helped as well.  As a result, the dollar strengthened against some currencies and that drove oil prices down as well.

Inflation continues to take a back seat as energy and other commodity prices fall, but they are not the only items in the equation and the Fed has turned the “hot water tap” to just about full open, and that means that we all could get burned once the really hot water begins to emerge.  Just like when you get in a shower and can’t wait for the hot water, you better be ready for it when it comes.

Technically speaking, bonds remain in their trading range, very near the tops.  Tomorrow’s jobs data could send them through their ceiling(s) of resistance and let them break free.  If not, stochastic and other indications are favoring a pullback in the near future.  What will tomorrow hold?

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