Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on September 30, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: 0bp

Mortgage backed securities are having a tough time with overhead resistance, though they seem to be relentless on their push against this level.  Yesterday, after opening lower, they ultimately held on to flat ground.  Today, they have been whipsawing back and forth across the same level ground, currently flat on the day.

The heavier data is starting to come in and is beginning to shape up the week ahead.  But let’s hit the less impacting reports first.  MBA Purchase Applications showed a 6.2% decrease in Purchase Applications (maybe that $8,000 tax credit is wearing off?) and a 0.8% decline in Refinance Applications.  GDP was almost exactly inline with expectations with Real GDP beating expectations with a showing of –0.7% versus –1.2%, and with the GDP Price Index exactly as expected at 0.0%.  Crude Inventories were also exactly as expected  with an increase of 2.8M barrels. 

The two main players in data today were the ADP Employment Report, which inaccurately forecasts Friday’s Jobs Report, and the Chicago PMI.  The ADP Employment Report showed estimates that private payrolls declined by 254K, which was worse than estimates of 200K.  Chicago PMI came in well below expectations at 46.1 versus estimates of 52.0 and is now back in the contraction zone. 

Basically, as the data played out this morning, the ADP report sent MBS prices higher, followed by the GDP data driving them back down, then rallying again around the Chicago PMI data.  Now, it appears overhead resistance is just too strong today, but if things continue to play out as they have been this week, expect that resistance to be tested, and maybe even break, as the week progresses.

What does this mean for Florida Mortgage Rates?  Mortgage rates are holding fairly steady today and likely will for the remainder of the week if economic data remains favorable.

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