Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on November 6, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -16bp

Those of you following my regular reports not only knew that I changed stances, but why, around midday yesterday.  Even if you only read my last report yesterday (just below), you knew where things would be headed today.

Mortgage backed securities have run up against the ceiling of their trading range and are now headed lower.  Even this morning’s worse than expected Initial Jobless Claims and higher than expected Productivity are unable to give mortgage bonds any comfort.  Initial Jobless Claims came in at 481K versus the expected 476K.  Productivity also was favorable as it came in at 1.1% versus 1.0%.

The Bank of England, as expected, slashed its key interest rate by 1.5%, bringing that rate (the equivalent of our Fed Funds Rate) down to 3.0%.  The ECB (European Central Bank) lowered theirs by 0.50% to 3.25% and that disappointed a lot of people as they wanted more aggressive cuts. The Swiss National Bank also lowered their rates by 0.50%.  The dollar strengthened as a result.

Once again, emotions seem to be subsiding and technical indications are now back in play, as is data.  Tomorrow’s Jobs Jamboree will be the big test to see just how true that last statement was, but the charts are showing mortgage bonds trapped within a wide sideways trading pattern that is only slowly narrowing.  Which way they break out may be a unseen for a long time, or tomorrow’s report may be the breaking point.  For now, bond pricing looks set to move lower and that will cause Florida Mortgage Rates to move higher.

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