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Friday, November 7, 2014

Mortgage Bond Market Analysis - Friday edition

Non-farm payrolls disappointed which is REALLY good for the benchmark bond.   They came in a a relatively wimpy 214K vs. estimates of 231K and previous of 256K.  This shows that the economic recovery continues to be very lethargic.  This is the first big move for the benchmark bond since October 15th.  It is also no longer oversold.  Where we go from here (even just for the day) is anybody's guess.  Is there enough momentum to push it to an even higher close or do investors sell off such that it closes up marginally?  How it closes could give us some insight to what may happen next week.

For those who rolled the dice on this one and waited to lock until after the data came out, you got a reward.  For those who locked prior to the data, you still got a great rate and you may be able to float down at some point depending on your lenders float down policy.  Of course, you can always call me and see what kind of rate I can get you - 702-812-1214.  Here's today's chart:

By the time I copied the chart there was a 6 basis point sell-off - no big deal unless it's the start of a bigger sell-off.  At the current price of 103.59 it is only 21 basis points below the October 15th close.  Today would be a great day to lock if you have a loan closing soon but if you have some time, you might want to float into next week and see if we get some follow-through.  If you decide to float, make sure you are judicious about checking on rates so that you don't get hit with a big down day that erases all of the gains - sometimes that can't be anticipated but sometimes if you catch it in time, you can lock before a your lender has a price change.  The key is for your loan officer to have access to the mortgage bond market so that he gets alerts as to price swings.

I'll be up in Utah through Tuesday so I may not be able to post anything on Monday and Tuesday.  Please feel free to share your thoughts in the comment section.  Please like, share and subscribe.  Make it a great day and a better weekend.  Utah is playing Oregon in college football tomorrow night - I hope the Utes will give them a respectable game and MAYBE pull of a big upset.

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