Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on May 20, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +31bp

Once again, as I mentioned yesterday and Tuesday, those ate alerts to lock issued on Monday were premature.  Since then, MBS prices have not only rebounded, but pushed to new heights, sending mortgage rates even lower.  Even today’s Treasury Announcement’s have failed to control the climb, and with no data tomorrow, that climb may yet continue, but let’s get into today’s data and news.

Jobless Claims were reported at 471K, well above estimates of 440K and has the 4-week moving average back on the rise, now up to 453.5K.  Leading Indicators, or Leading Economic Indicators/LEI, came in at –0.1%, below estimates of 0.1% and down from 1.4%, certainly not showing a solid economic outlook.  The biggest report of the day, the Philadelphia Fed Survey, showed its General Business Conditions Index at 21.4, just below estimates of 21.5, and up from 20.2.  The Treasury announced the upcoming auctions as follows:  $42.0B for 2-year T-Note, $40.0B for 5-year T-Note, and $31.0B for the 7-year T-Note.  Money Supply is the only other data play this afternoon, but rarely moves the markets.  Stocks are heading lower as on continued European woes and that is helping drive MBS prices higher.

Looking at the charts, we see a continued strong picture overall.  Stochastic indications are moving into the overbought spectrum, but still have room to keep MBS prices on the rise for now.  Remember, we have seen a nice run-up in MBS prices recently and even Monday’s pullback from its highs did not produce a solid retracement, so one is lurking in the shadows.  Despite the need for a corrective move, the charts are still favoring steady to improving mortgage rates for the short-term, and even the long-term.

What does this mean for Mortgage Rates?  Mortgage rates are again improving today, but be ready for a corrective move in the near future.  The short-term outlook and long-term outlook both favor steady to improving mortgage rates, except for the potential correction in the near future.

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