Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on May 6, 2009

Locking Stance: LOCKING    Mortgage Bonds: +0bp

Mortgage backed securities managed another positive day, ending up 12 basis points and just above their 25-day moving average on Fed purchasing and a down day on stocks, though only slightly.  Big Ben talked about rates dropping due to their market manipulation of the MBS (and Treasury) market, along with the signs of economic recovery beginning.

This morning already saw another sign of economic improvement, though not a very reliable one.  The ADP Employment Report was released and it forecasts Friday’s jobs data to be much better than expected, forecasting job losses of 491K versus expectations of 645K.  While this report is not very accurate at predicting the actual jobs numbers, traders do react to it and that will likely pressure mortgage bonds back below their 25-day moving average, which is what I had forecasted for this week.

There are some more Fed speeches today, along with Treasury Auctions and the Crude Inventories report.  Janet Yellen had been downplaying the economic recovery, so expect her to continue to do so and Gary Stern may do the same.  The Treasury Auctions this afternoon will include the 10-year T-Note and Treasury STRIPS, which will likely add to MBS pricing pressures as traders have been demanding higher yields on longer term Treasuries lately.

What does this mean for Florida Mortgage Rates?  I expect mortgage rates to climb today, and likely for the future, that is unless the Fed really throws massive amounts of money into the equation, which I suspect won’t happen until Friday.

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