Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on January 8, 2010

Locking Stance: LOCKING    Mortgage bonds: +34bp

Mortgage backed securities fell 25 basis points yesterday, much on the heels of the Treasury Announcements.  This morning, they are reversing course somewhat on the heels of a worse than expected Jobs Report.  There are still many negative signs and I do not see the long-term downtrend as being broken yet.

The Jobs Jamboree was released this morning and was a surprise in favor of MBS prices.  Nonfarm Payrolls were expected to be around 0 but came in at –85,000.  The Unemployment Rate was expected to rise to 10.1%, but held steady at 10.0%, so that aspect was not in mortgage bonds’ favor.  The Average Work Week and Hourly Earnings both came in inline with expectations, so no surprises there.  Still to come are Wholesale trade and speeches by Eric Rosengren, Dennis Lockhart and Jeffrey Lacker.  Consumer Credit will also be released this afternoon.

Looking at the charts, this move higher is a positive sign, but there are still many negatives, one being the fact the 25-day MA is now just 3bp from crossing below the 200-day MA and the two form a double ceiling of resistance right now.  Stochastic indications have also turned negative and have plenty of room before entering into oversold territory again.  So far, all attempts for MBS prices to climb above their last peak have proved futile. 

What does this mean for Florida Mortgage Rates?  Mortgage rates have improved slightly over yesterday, but the outlook still remains most favorable for higher mortgage rates.  However, the next day or so may change that picture if mortgage rates can make a strong push lower.

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