Mortgage Rates Improved Following ECB Conference
Mortgage
rates improved following the ECB press conference with
President Draghi. Even though there is
no direct correlation between the mortgage rates and this announcement, somehow
a connection was made and stock prices and bond yields sank – which prove
beneficial for Mortgage Bond Securities (MBS).
The most prevalently quoted conforming 30yr fixed rates for top tier
borrowers was still at 4.0%, but 3.875% came into the picture again
today.
Today is one of those days that caught me with my
pants down as the 10yr note rallied nicely taking MBS prices higher ahead of
the report tomorrow. Technically we
still hold a positive bias for the bond and mortgage markets in the near term,
however I did not expect the kind of support we saw today. The take away for me is that tomorrow’s employment
report will not be a crucial as it is normally is because markets are more and
more coming around to understand that there is no inflation now, and there is
not going to be for quite awhile, regardless of the number of jobs announced. No possibility for wage increases and
consumer spending still very slow except for auto and truck sales = as other
consumer spending remain weak.
Just a FYI, the 10yr had a nice day as it went away
from the resistant level down to 2.24%.
In summary, to lock or not to lock is the question
on everybody’s mind today ahead of the Jobs Report. Technicals favor floating, as we are trading
below specific levels that would warrant more caution. The only downside is that unless unemployment
data is a disappointment, the likely result will be a modest improvement to
costs associated with rates than the actual rate itself. Tomorrow will tell the
tale of the tape, but my suggestion was to lock ahead of the report as it could
go either way.
Remember, if you want to know the benefits of
locking your rate today versus floating, simply give me a call at 314-744-7806
or visit my website at www.CallTheMoneyMan.com.
I have access to real time Wall Street data and instant market alerts with
breaking news that I monitor throughout the day to assist us on making the
informed decision.
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