Daily Mortgage Rates Predictions June 02
Rates are still heading higher.
The ISM Non-Manufacturing Survey beats expectations this morning. This was the only scheduled economic indicator released today. Wachovia released it’s CEO Kennedy Thompson today due to continued backlash from Sub-Prime Mortgages. The Nation’s 5th largest bank lost half of its stock value from last year. With the ISM report being positive and looming inflation fears, the 200 day moving average appears to be out of reach for mortgage bonds any time soon. Currently, the Fannie Mae Mortgage Backed Securities are +9bp on the day at 99.28 on the news about Wachovia and struggling airlines. That is actually -12bp lower since the ISM reported at 10:00am. We will be keeping our eyes on the stock market to see signs of pain in the economy that may be helpful for low risk mortgage backed securities.
Daily Mortgage Rates Predictions
Rates are still heading higher… The 200 day moving average is a ceiling bonds can’t seam to break through.
This morning all of the economic indicators met expectations. Personal Income was up 0.2%, but inflation was also up, so consumers will feel no benefit of those gains. After 6 rough days for Mortgage Bonds there was a glimmer of hope this morning when bonds attempted to rally up to 99.53 [+50bp] on the day. The 200 Day moving average is at 99.48. Unfortunately, Mortgage Bonds hit the 200 Day moving average and declined to currently only being up +28bp on the day. We will be looking to next weeks economic indicators to see if Mortgage Bonds can break the 200 day ceiling of support.
Daily Mortgage Rate Predictions
Rates are heading higher… Looks like the 200 day moving average couldn’t hold.
The 200 day moving average was broken this morning. The GPD was lower than expectations of 1.0%, but showed growth from the 0.6% Q4 2007. Yesterday the Treasury Auction of 2 Year Notes was not received well. Today the Treasury will be selling 5 Year Notes at 1:00pm. The 200 Day moving average was an important line for bonds to cross. The last time it was broken mortgage rates ran to the upper 6’s. Currently the FNMA Bond is down -69bp at 98.78. This kind of volatility was unheard of last year.
Daily Mortgage Rates Predictions
Rates are heading higher.
Inflation is the name of the game still today. Even with the lowest consumer confidence report in 16 years, Mortgage Backed Securities can’t seam to recover. Consumer’s fear of rising fuel and food prices is the major contributor to the low Consumer Confidence report. The fact that new home sales beat estimates was another kick in gut for mortgage bonds. Currently the FNMA Mortgage Bond is -34bp on the day selling at $100.00. The San Francisco Fed President Janet Yellen reminded us this afternoon that the Fed has lowered rates enough and will be sticking to their holding policy at the next fed meeting. Bonds are hurting and could touch the 200 day moving average at $99.44 [54bp lower!]. We will be keeping our eyes on the stock market this week and anxiously waiting for Thursday and Fridays economic indicators.