Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on July 9, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: –41bp

Mortgage backed securities had a wonderful day yesterday, moving 66 basis points higher overall, though off their highs slightly.  They were fueled by a better than expected 10-year T-Note auction, which had a bid/cover ratio of 3.28 and brought yields down to 3.365%.  With nothing negative really to stop them, MBS pricing easily rallied beyond their 50-day moving average, all the way up to and even slightly through their 100-day moving average.

As with any big move,  there needs to be a correction, and we are seeing one this morning.  The correction is fueled by the release of the Jobless Claims data for this week, which was considerably better than expected, coming in at –565K versus the –610K estimated.  We have a couple of minor reports to go, but the next test of the markets will most likely be this afternoon’s 30-year T-Bond Auction (1:00).

Getting back to the charts, we still see stochastic indications in the overbought spectrum, in fact maxing out right now, so a move lower is imminent.  However, with the break above the 50-day moving average, support is not much below their current levels (45bp) and may very well keep mortgage rates from moving significantly higher from here.  Also, mortgage bonds appear to be shrugging off the negativity surrounding the Jobless Claims data, so they may very well attempt to break the resistance of the 100-day moving average again today, likely dependent upon the outcome of the 30-year T-Bond auction.

What does this mean for Florida Mortgage Rates?  Mortgage rates may tick higher slightly this morning, but there is a chance they will recover as the day goes on.  The overall outlook is for lower mortgage rates.

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