Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on August 13, 2009

Locking Stance: LOCKING    Mortgage Bonds: +19bp

Mortgage backed securities rallied a bit yesterday afternoon, ending the day down only 9 basis points, but the 50-day moving average proved too strong for them to break. That fact has been the case for the last three trading days and looks to hold again today despite weak data.

We already had a big report and another fairly big report released today, which were Retail Sales and Jobless Claims.  Retail Sales came in much worse than expected, which is what is giving mortgage bonds their boost today.  Retail Sales overall came in at –0.1% versus expectations of 0.8% and when you take out autos they still missed by a long shot with a showing of –0.6% versus 0.1%.  Jobless Claims are also helping MBS pricing as they came in above expectations with a showing of 558K versus 543K, though continuing claims fell by another 141K (still likely due to expiration of benefits).  There are several minor reports and the short term Treasury Announcements to be seen, but the next big event for the markets will be this afternoon’s 30-year Treasury Bond Auction which will be released at 1:00.  With yesterday’s 10-year T-Note proving sloppy, the 30-year T-Bond may drive mortgage bond prices lower.

Looking at the charts, we can see the 50-day moving average is proving to be a tough layer of resistance and continues to beat back MBS prices.  We are seeing a negative crossover of stochastics and that signals that mortgage bonds are likely loosing their strength and ready to take the next leg lower.  Adding to that the fact that this morning’s data was unable to provide the strength needed to break higher, virtually all signals are now pointing toward lower mortgage backed securities pricing and that means higher mortgage rates.

What does this mean for Florida Mortgage Rates?  Despite the tick lower late yesterday and this morning, mortgage rates remain poised to climb higher.

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