Florida Mortgage Rates – Morning Update

by Florida's #1 Mortgage Planner on June 13, 2008

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +28bp

Mortgage bonds are getting a rally today, despite the CPI data.  It is important to keep in mind that this move higher is still expected as the stochastics show bonds remaining in an oversold condition.  Therefore, caution needs to be exercised as bonds will likely return to their downward trend.

Today’s CPI data showed what I have expected, inflation climbing.  The data was higher than expected, coming in at 0.6% versus 0.5%.  That was the fastest pace in 6 months and the data will likely be worse by the next report.  The only good news in the report is that inflation at the core level (excluding volatile food and energy) was in line with expectations.

Consumer Sentiment came in lower than expected, giving bonds a welcome bit of news.  The difference was fairly large with sentiment being 56.7 versus expectations of 59.8. 

As we go into the weekend and looking at next week, bonds will likely manage a move at least slightly higher to correct itself.  Beyond that, bonds will likely resume the downtrend, so float for now and take the gains, but be ready to lock once the correction is complete.

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