Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on May 7, 2010

Locking Stance: LOCKING    Mortgage Bonds: +19bp

When I said to expect volatility yesterday, I had no idea what was going to happen.  The ride yesterday was enough to make even the strongest stomach hurl as the Dow dropped over 1,000, then rebounded, causing MBS prices to react higher, with a whopping 150 basis point gain at one point, then dropping back to up just a few, finally resting at up 44bp.  Despite the European debt woes, which continue today, most of the market move was apparently caused by erroneous trades or “fat fingers”, with investigations underway as to exactly what happened.

Today, expect more volatility that will likely be carried over from yesterday, as traders continue to be in the “fear factor”.  The big deal this morning was the monthly Jobs Jamboree, so let’s get into the “real” stuff and not all the “fluff”.  Nonfarm Payrolls were higher than expected at 290,000 versus the consensus of 200,000, and after Wednesday’s disappointing numbers, this is certainly not good news for MBS prices or mortgage rates.  Adding to the confusion, however, is the fact the Unemployment Rate actually rose to 9.9%, above expectations of a drop to 9.6%.  Average Hourly Earnings came in at 0.0%, below expectations of 0.2% and the Average Work Week rose to 34.1, just above expectations of it maintaining 34.0.

Consumer Credit will be up this afternoon, but don’t expect much activity afterward.  Philadelphia Federal Reserve Bank President Charles Plosser addresses the Delaware State Chamber of Commerce Economic Outlook luncheon in Wilmington at 11:30, also not likely to overwhelm the current market sentiment.  So again we find traders reacting to the ongoing European debt crisis and trying to figure out exactly how they should be playing the market after yesterday’s fiasco.  As mentioned above, volatility will be rampant, as it already has been.

What does this mean for Mortgage Rates?  The charts are somewhat skewed after yesterday’s screw up, but unless you like puking your guts up, just lock and be happy and that way you can enjoy your weekend.


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