"Mortgage Bonds are soaring higher this morning, thanks to the Fed reiterating its New Year's Resolution to purchase $500 Billion of Mortgage Backed Securities by June 2009. The announcement has led to another wild disconnect between Mortgage Bonds and Treasuries, as the 10-Year Note is trading sharply lower, while Mortgage Bonds are sharply higher.
In other news, Initial Jobless Claims were reported at 492,000, which was well below expectations that it would rise to 575,000. The Labor Department said that seasonal volatility led to the surprise drop in unemployment claims
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved
Tuesday, December 30, 2008
"Bonds prices declined yesterday afternoon and so far this morning, good news for Stocks is keeping the selling pressure on Bonds. GMAC received a $6 Billion lifeline today from the Treasury to help stave off bankruptcy or a shut down. Stocks are moving higher on the good news, which is pulling more money out of Bonds.
In other news, Consumer Confidence came in at a record low of 38.0. This time last year, Consumer Confidence was at 88.6. So there's been quite a decline during 2008.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
In other news, Consumer Confidence came in at a record low of 38.0. This time last year, Consumer Confidence was at 88.6. So there's been quite a decline during 2008.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
Monday, December 29, 2008
"Stocks opened higher this morning but have since reversed course, as tensions in the Middle East sent crude oil higher on concerns of supply disruption. Higher oil prices could boost Stock prices in the energy sector and may help lift the entire Stock market later today, but the rise in Middle East tensions may also help Bonds improve as traders seek a safe haven for investments.
There are no economic reports due out today, and the Bond market faces another short holiday week--with the market closing early on Wednesday and remaining closed all day Thursday in celebration of the New Year. This holiday environment creates lower trading volumes, which can cause unexpected price movements and additional volatility.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved
There are no economic reports due out today, and the Bond market faces another short holiday week--with the market closing early on Wednesday and remaining closed all day Thursday in celebration of the New Year. This holiday environment creates lower trading volumes, which can cause unexpected price movements and additional volatility.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved
Wednesday, December 24, 2008
"Typically bad economic news is good for Bonds. And, as Mortgage Bonds are trading higher on the heels of some Bond friendly data, that's good for rates.
Initial Jobless Claims jumped by 30,000 to 586,000 and the four-week average of continuing claims rose to 4.32 million, which is the most since December 1982. Also on the news front, Personal Spending fell 0.6% in November amid mounting job losses and economic uncertainty. While this number was bad, it was a bit better than expectations.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
Initial Jobless Claims jumped by 30,000 to 586,000 and the four-week average of continuing claims rose to 4.32 million, which is the most since December 1982. Also on the news front, Personal Spending fell 0.6% in November amid mounting job losses and economic uncertainty. While this number was bad, it was a bit better than expectations.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
Tuesday, December 23, 2008
"Declining home sales are in the news this morning, as the median sales price of existing homes fell more than 13% over the past year. In addition, New Home Sales came in below expectations--falling to their lowest reading in 27 years.
During times like this, it's important to remember that while inventories are high and need to come down for housing prices to stabilize, the combination of abundant inventory and low interest rates does provide a great opportunity for buyers to purchase homes below market prices and at great monthly payment rates.
Currently, Mortgage Bonds are clawing their way back, after opening lower this morning.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
During times like this, it's important to remember that while inventories are high and need to come down for housing prices to stabilize, the combination of abundant inventory and low interest rates does provide a great opportunity for buyers to purchase homes below market prices and at great monthly payment rates.
Currently, Mortgage Bonds are clawing their way back, after opening lower this morning.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
Monday, December 22, 2008
"Mortgage Bonds are trading lower as we kick off the short holiday week. The Bond markets will close at 2 pm Eastern Time on Wednesday and will be closed all day Thursday for Christmas. Friday will be a regular trading session.
There are no economic reports due out today. However, later this afternoon, a record $38 Billion auction of 2-year Treasury Notes could influence prices, as the market absorbs additional supply.
Currently, Mortgage Bonds are trading in a wide range between resistance and support.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
There are no economic reports due out today. However, later this afternoon, a record $38 Billion auction of 2-year Treasury Notes could influence prices, as the market absorbs additional supply.
Currently, Mortgage Bonds are trading in a wide range between resistance and support.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.
Friday, December 19, 2008
Good Morning,
There is no economic news today.
In a speech from Bush this morning, the Auto makers will receive 17.4 billion to assist them with their intermediary capital issues. The auto makers will have until March to have a plan together regarding how they will restructure. The 17.4 Billion must be repaid, however no time line was spelled out in the speech. The loans may act as an ease for the companies to enter into chapter 11 bankruptcy.
What has this done for MBS? We have been all over the place this morning.
As stocks increase on the news, treasuries and MBS have suffered somewhat.
Many people that have been following MBS have noticed that mortgage pricing should probably be better than it is. That leads of course to the Why?
With the volatility that we've had recently for one with rates dropping significantly, prepayments - due to rates dropping, forward unmet commitments, foreclosure risk, EPO's and EDP's - Investors really don't know where to price anymore. For example, if you purchased MBS with a yield of say 1%, it is going to take some time to see those profits. If the loan pays off early - well, that was a total waste of time for the investor as they will see no gains whatsoever. The reality of gain I was told is roughly 4 years of performance.
Jay Cain - Bank of Ann Arbor
There is no economic news today.
In a speech from Bush this morning, the Auto makers will receive 17.4 billion to assist them with their intermediary capital issues. The auto makers will have until March to have a plan together regarding how they will restructure. The 17.4 Billion must be repaid, however no time line was spelled out in the speech. The loans may act as an ease for the companies to enter into chapter 11 bankruptcy.
What has this done for MBS? We have been all over the place this morning.
As stocks increase on the news, treasuries and MBS have suffered somewhat.
Many people that have been following MBS have noticed that mortgage pricing should probably be better than it is. That leads of course to the Why?
With the volatility that we've had recently for one with rates dropping significantly, prepayments - due to rates dropping, forward unmet commitments, foreclosure risk, EPO's and EDP's - Investors really don't know where to price anymore. For example, if you purchased MBS with a yield of say 1%, it is going to take some time to see those profits. If the loan pays off early - well, that was a total waste of time for the investor as they will see no gains whatsoever. The reality of gain I was told is roughly 4 years of performance.
Jay Cain - Bank of Ann Arbor
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