Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on January 29, 2010

(this report is also available at MBS Commentary)

Locking Stance: LOCKING    Mortgage Bonds: -12bp

Mortgage backed securities are actually showing some strength today, being down only a few basis points after this morning’s data.  I still do not like the charts, but at least during trading today we hit that solid retracement level.  That means this could be the beginning of the resumption of a sideways pattern, or possibly even and uptrend in MBS prices, aka lower mortgage rates.  It is still too early to tell for sure, and there are still negative signs in the charts, hence my lack of change in stance thus far.

Today, as mentioned already, saw some data plays that typically move the markets, and they did just that, initially.  GDP started it off, well after Donald Kohn began his speech this morning.  Real GDP beat expectations with a 5.7% versus 4.5% expected.  That is not good news for MBS prices, but there was a ray of hope in that report.  The GDP Price index, aka Chain Deflator, was lower than expected at 0.6% versus 1.3% and thaat indicates tame inflation.  The Employment Cost Index (ECI) was slightly better than expected, however, with a 0.5% versus 0.4%.  The year/year change remained at 1.5%, so it was not bad news for mortgage bonds.  Then came Chicago PMI’s results, which beat expectations with a 61.5 versus 57.0, a blow to MBS prices.  And finally Consumer Sentiment beat expectations, keeping up with the trend for today, with a 74.4 versus 73.0 showing.  Overall, data was certainly not favorable for mortgage bonds, but they have been bouncing off support at their 200-day MA, which shows some hope.

What does this mean for Mortgage Rates?  Mortgage rates are edging higher today and may continue to rise.  However, the future is still uncertain and there is a glimmer of hope.

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