Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 1, 2010

Locking Stance: LOCKING    Mortgage Bonds: +9bp

I hope everyone had a wonderful extended weekend and didn’t miss my weekly Mortgage Market Update at Lenderama nor my new online radio show at Blog Talk Radio (can be accessed in the sidebar to the right).  If you did miss them, take a moment after reading this to get caught up.  I will admit that the radio show was rougher than the first one, but hey, I was on a mini vacation and was afraid my kids were going to run into the room while I was broadcasting, lol.

As I mentioned on in both locations, my feeling was that MBS prices did not complete a full, or solid, retracement before beginning to move higher on Friday.  While I would not be surprised to see mortgage backed securities drop to their 25-day moving average, they might continue to move higher and that caution was to be heeded and volatility would likely reign.  Well, the latter seems to be taking place, or at least trying to, that is MBS prices attempting to push higher, though this attempt likely will lack the strength needed to “break free”.  Currently, MBS prices are trying (and failing) to break above their 10-day moving average on what has already been a semi-volatile day.  Overall, the charts still look good for the long-haul, but remain somewhat skeptical for the short-term, so be ready to lock very quickly if you decide to float still.

The main piece of data for today was the ISM Manufacturing Index, which came in essentially inline with expectations at 59.7 (59.5 was the consensus) and down slightly from the 60.4 reported last month.  The data shows economic growth, though the rate is slowing and remains “modest”.  Construction Spending was also released, though not a major player.  Construction Spending came in well above expectations with a show of 2.7% versus 0.0% and up to –10.5% year/year.  Traders will be focusing in on continued news around the globe, stocks and this morning’s short-term Treasury Auctions of the 3-month and 6-month T-Bills.  So far, these auctions have been strong, so any weakness could trigger a pullback in MBS prices and send mortgage rates higher.

What does this mean for Mortgage Rates?  Mortgage rates are holding fairly steady today and may continue to do so.  While some improvement may be seen later today, there is an equally strong chance mortgage rates could deteriorate as well. 

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