Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 17, 2009

Locking Stance: LOCKING    Mortgage Bonds: +34bp

Mortgage backed securities rallied through their 200-day moving average, something I was not expecting, yesterday.  The rally was contributed by several factors…low inflation outlook (PPI), lack of a Treasury flood, and the talk about an economy worse than people realize by Kevin Warsh (Fed Governor).  And interestingly enough, despite seeing climbs of around 25% in gasoline prices, inflation comes in at just 0.1% both overall and ex-food and energy.  Things that make you go hmmm.

That’s right, this morning’s Consumer Price Index came in at 0.1% versus 0.3% overall and was inline with expectations of 0.1% at the core level (excluding food and energy).  So that would roughly mean that food and energy prices stayed the same last month, despite the fact you paid about 25% more at the pump.  Big Ben is speaking right now, along with Sheila Blair, and we are now essentially done with the data plays for the day, though crude inventories will be released soon.

So, that brings back to my favorite, technicals, and now we have a very interesting picture.  Over the last two weeks, we have seen 5 straight down days, and now five straight up days, so we are essentially where we ere two weeks ago.  It would appear the downtrend may have been broken, especially since the 200-day moving average was broken yet again, though we have yet to see a retracement of this recent upswing, which will have to test the 200-day moving average, if not break it again.  We sit right now, bumping up against the 25-day moving average, which is acting as resistance and may get the retracement back lower started.  Stochastic indications are on middle ground, though a negative crossover may occur soon.

What does this mean for Florida Mortgage Rates?  Mortgage rates managed to tick lower yesterday and even changed the overall outlook into an uncertain one, which will remain uncertain for at least a couple of days.

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