Florida Mortgage Rates – Midday Report

by Florida's #1 Mortgage Planner on August 19, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +3bp

Mortgage backed securities are failing to do anything today, despite this morning’s news.  With everything that was released this morning, coupled with the fact oil prices are spiking again, one would think that bonds would be headed lower.

So why aren’t they?

In one word, stocks.  Stocks are plunging today and that means money flows into bonds, a fundamental that remains almost guarantee throughout the years.  With stocks dropping, almost inevitably bonds will rise.  The reason they are not rising further is due to this morning’s news.

Looking at the charts, the fact bonds continue to hold their ground is a good thing.  Stochastic indications remain on the overbought side and the overall trend is still to the downside, so odds still favor lower prices.  That being said, the picture could change dramatically in the coming days, especially if MBS respond favorably to the Philadelphia Fed Index.

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