Locking Stance: LOCKING Mortgage Bonds: -9bp
Mortgage bonds managed to make some gains late in the day, coming off their highs, but still down for the day. News and technicals ruled the day for the most part, despite the quadruple witching effect.
I had some inquiries as to just what is “quadruple witching”. Each month, options and futures are set to expire. You will here terms related to quadruple and triple witching whenever three or four are set to expire the same Friday. So, the quadruple witching is when stock options, stock index options, stock index futures and single stock futures are expire at the closing of the trading day.
OK, the big news of the day was that the Big 3 auto companies got their bailout from the government, albeit via the White House. The bailout is for $13.4 billion ($9.4 billion for GM and $4 billion for Chrysler) with another $4 billion for Chrysler in February if needed. Ford was merely looking for $9 billion in a credit line just in case.
What does this mean for Florida Mortgage Rates? As the week drew to a close, mortgage rates were already beginning to move higher, as expected. Looking at the technical picture, odds favor increasing mortgage rates going into next week.
Look for my weekly Mortgage Market Update over at Lenderama either Sunday night or Monday morning, either before or after my flight back from Brazil.