Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 11, 2010

Locking Stance: LOCKING  Mortgage Bonds: -3bp

Mortgage backed securities had another down day, closing down about 16 basis points after being down considerably more during the trading day.  At the end of the day, MBS prices were resting on their 200-day moving average.  With the significant move lower recently, there will need to be a retracement, though when is still in question.

Yesterday’s news was that Bernanke hinted on the start of rate hikes drawing near and the continued pullout of MBS purchasing, certainly not what mortgage bond traders wanted to hear.  Adding to MBS pricing problems was the results of the 10-year T-Note auction which was disappointing and one can only hope this was due to “Snowmaggedon”.  This morning’s Jobless Claims report is not helping either as the actual number was 440K versus expectations of 467K.  Retail Sales was originally scheduled for today as well, but has been postponed until tomorrow, so MBS prices may not move much today as traders await that data.  This afternoon will see the last of this week’s Treasury Auctions, this one being the more important 30-year T-Bond.  Any more dismal results will likely send MBS prices plummeting while a solid auction could boost MBS prices.

What does this mean for Mortgage Rates?  Expect a narrow trading range early in the day but auction results could send mortgage rates higher still.  The short-term outlook favors a corrective move of lower mortgage rates though the long-term still points to higher mortgage rates at the moment.

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