Mortgage Rates Predictions

  

  

  

  

  

  

June 6, 2008 | Rates are still trending higher, even with a 5.5% Unemployment Rate…

This mornings Employment Report had a little suprise hidden inside it.  The unemployment rate made an unbelievable +.5% increase in just a month!  Non-Farm Payrolls and Hourly Earnings ended up better than economist estimated.   The shocking unemployment rate usually would give Mortgage Backed Bonds the boost it needs to approach the 200 day moving average.  Already this morning Mortgage Bonds have seen a low of 98.5625 and a high of 99.25.  That is almost a 69bp swing!  With this volatility floating an interest rate is ludicrous.  Even though FNMA Bonds are currently +12bp on the day, it looks like going into the weekend and the fact that any real ELEVATED market moving economic indicators will not be reported until Retail Sales next Thursday, I believe rates are still heading higher.  We will keep an eye on the stock market for signs of weakness and keep you updated if Mortgage Bonds gain steam.

Daily Mortgage Rates Predictions

Rates will be Heading Down since the 200 day moving average held up.

The better than estimated Durable Goods Orders helped drive Bond prices down to touch the 200 day moving average this morning.  As predicted the floor of support at 99.46 held, but the -64bp loss will have cost us to lose at least .125% on the 30 Year Fixed Rates this morning.  Crude Inventories will be reported shortly.  Since the Mortgage Backed Securities are currently only down -34bp on the day [+9bp since most rates were issued and a long way from the -64bp] Mortgage Rates should be heading up.  We will be closely monitoring the stock market to see how it reacts to the Crude Inventories, hopefully stock are down and Mortgage Bond prices increase giving us improved rates today.  Tomorrow the GDP Chain Deflator signaling inflation under control would be what we need to get back in the 5’s.