Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on September 15, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: –19bp

Mortgage backed securities are still in a correction at the moment, and if you remember, I had talked about a pullback to the 100-day moving average as being expected, though since then we have seen the 25-day moving average crossover and above that level.  So what is going on today?

Retail Sales actually came in better besides the fact that last week’s Consumer Credit report showed a major contraction.  In fact, Retail Sales came in at 2.7%, well above the expectations of 2.0%.  And when you take autos out of the equation, we still showed a considerable gain at 1.1% versus the expectations of just 0.4%.  Certainly not helping MBS pricing, inflation at the producer level was higher than expected as the PPI came in at 1.7% versus estimates of 0.8% and the Core PPI was 0.2% versus 0.1%.  And the Empire State Manufacturing Survey was considerably higher than expected as well, coming in at 18.88 versus 14.0.   Big Ben Bernanke will be speaking at 10:00 today and there is a 4-week treasury Auction this afternoon, but chances are the markets will not react much different than they already have.

On the technical side of things, we are seeing the pullback I have talked about for a while, hence why I have not switched stances.  We have pulled back as far as the 100-day moving average, yet each time mortgage bonds have bounced higher from those levels.  We still some negatives in stochastic indications, so we must remain cautious, however as long as MBS pricing maintains its levels above their 100-day moving average, we likely will remain in a sideways type trading pattern, meaning lower mortgage rates should still be ahead.

What does this mean for Florida Mortgage Rates?  Mortgage rates are ticking higher slightly today, which was expected, but the outlook remains capable of steady to lower mortgage rates.

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