Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 9, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: –3bp

Mortgage backed securities finished yesterday down 12 basis points in what is likely the beginning of a corrective period, which is normal after any run-up (or down) in MBS prices.  Even with this morning’s continued drop, we are well above support at the 100-day moving average (and the 10-day as well), so this remains nothing more than a retracement as it appears now.

Data is again essentially non-existent today as no reports that typically are market movers are on the docket for today.  That leaves Treasury Auctions at the forefront, along with technical indications and news, along with direction from stocks.  Mortgage bonds typically move opposite of stocks, but as you can see from yesterday, that is not always the case, but stocks still play a role in MBS price movement.  Yesterday’s Treasury Auctions went well as they saw continued strong demand, though the bid/cover ratios dropped due to the large auction sizes.  Overall, not a bad day for short-term Treasuries and, thus, mortgage backed securities.  More Treasury Auctions are being completed today with MBS traders’ eyes on the 3-year T-Note results due out at 1:00.

As I stated, data does not include market movers, but there are some reports that may make ripples.  This morning already saw the ICSC-Goldman Store Sales report which showed Store Sales up 1.4% week/week and 1.8% year/year.  Don’t it with a grain of salt as this jump was likely due mostly because of the bad weather, and believe it or not, the Super Bowl.  The Redbook report saw its year/year change at 2.0%, again boosted by the Super Bowl phenomenon of increased sales of TVs, snacks and beverages.  Retail Sales will be the key measure of sales and will be released Thursday.  Wholesale Trade is slated to be released at 10:00 and that will conclude the data plays.

What does this mean for Mortgage Rates?  Mortgage rates will likely continue to edge higher slowly over the short-term with the longer-term outlook remaining favorable for lower mortgage rates.

(don’t forget you can view these reports at MBS Commentary and check out that website as it gets developed)

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