Data Weak
3/31/10 Mortgage Backed Securities are plus 3bp this morning. ADP employment numbers and the Chicago Purchasing Managers Index are both lower than expected. Bond markets improved after the news. With the Fed exiting the MBS purchase program today there was no huge rally. Fed officials have started talking about the sale of their 1.25 trillion dollars of MBS. It will not happen over night, but it will start happening and that will make rates go up over time. The Fed had used its...

Confidence Higher
3/30/10 Mortgage Backed Securities are minus 25bp this morning. Consumer confidence is better than analysts' expectations and is causing a small rally in stocks. The Fed has reduced the amount of MBS that they are purchasing and end the purchase program tomorrow. This has and will create volatility in the MBS market. Locking will be our stance for the near future as we evaluate how the the Fed exiting the MBS market will effect rates. There is an abundence of high impact...

Sentiment Unchanged
3/26/10 Mortgage Backed Securities are plus 22bp this morning. Consumer Sentiment was in line with analysts' expectations. Greece's debt fears seem to be easing. Today is a slow news day. We will be watching the stock market for direction. Next week there is plenty of news on tap. The Fed's MBS purchase program also ends. We will be watching rates very carefully. Have a great weekend.

I have listed the average monthly rate for the 30 year fixed rate mortgage...

Look Kids, Big Ben... Again
3/25/10 Mortgage Backed Securities are minus 6bp this morning. Yesterday afternoon MBS were down as many as 81bp. That has caused rates to start to climb here today. Chairman Ben Bernanke is speaking in front of the House Financial Services Committee regarding the exit strategy for the Fed Emergency Liquidity Programs. The Chairman should stick to the script and we should expect no major revelation in his testimony.

We said yesterday that there...

Sell Off
3/24/10 Mortgage Backed Securities are minus 28bp this morning. We are seeing a sell off in bonds today. There has been no tangible reason for the sell off. I can only speculate that after a fair response to yesterday's auction that the 42 billion auction that is on tap for today is giving investors pause. It could also have to do with the time of year. Rates typically move higher going into the spring purchase season. No other high impact news is on tap for this week.
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