tag:blogger.com,1999:blog-56730804443663092772024-03-06T12:02:09.463-08:00Mortgage and Real Estate News and TipsThoughts about the mortgage and real estate industries and the challenges we face and some possible solutions. I'm always happy to hear your ideas, so please feel free to share your ideas for all the readers to see.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.comBlogger314125tag:blogger.com,1999:blog-5673080444366309277.post-86730365074992127442016-11-14T07:30:00.003-08:002016-11-14T07:54:34.860-08:00The FNMA Benchmark Bond Continues Its Selloff...<b>After Trump's victory on Tuesday, </b>the stock markets have surged and while the gains this morning aren't nearly as big as they were last Wednesday through Friday, the sell-off in the mortgage bond market is about as big as last Wednesday. In my last post I recommended locking but did think that there was a possibility of traders buying since the RSI was oversold then. It remains oversold and even if the Fed decides to raise rates in December, at the current price of 100.19 the FNMA benchmark bond is oversold since it is down 264 basis points since the open at 102.83 on Wednesday (I should note that about 32 basis points of this was due to the monthly bond roll-over). This translates into an increase in rate of about .5-.625%. This is massive and is oversold by probably 150 basis points or more...unless they think the Fed might increase rates by more than .25% but that is not warranted based on the economic data.<br />
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While nobody has a crystal ball and it's hard to tell if bonds will continue to sell off, logic says that traders will see a buying opportunity sooner rather than later. My recommendation would be to float - you may have to be patient which means you may need some time. If you are closing within 15 days, you may not have the time. Based on the prognostications of what the Fed has hinted at, the math says the market is oversold. Contact me if I can help in any way, including current updates to how mortgage bonds are doing: 801-893-1737, 702-812-1214 or jed.wunderli@noblehomeloans.com. I'd love to help you or a client / friend with a mortgage for a purchase of your home or any other mortgage need. Keep a close eye on the mortgage bond market so that you can lock at a good time if traders start buying again.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-58015770607020121472016-11-09T10:02:00.003-08:002016-11-09T12:09:00.929-08:00The financial markets are acting oddly after Trump's victory<b>Happy Hump day. </b>Here's the thing - financial markets HATE uncertainty. As I was watching the election show last night they talked about the Dow futures a couple of times and how much they were down when they started thinking that Trump was going to win. They talked about how Trump is an unknown as far as how he'll govern and that the markets are reacting to this uncertainty. As you now know, Trump won and the stock markets are loving it for the time being as they are all up somewhat nicely. Usually, when there is uncertainty in the world, stocks sell off and money moves to the safe-haven investments of bonds which is what it was looking like last night but this morning is a completely different story. The stock market indices are all up somewhat significantly while bonds are selling off. In the case of the FNMA benchmark bond, it is down which is a bit over a .125% increase in rate.<br />
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While the media chose to focus on Trump as an unknown from a political perspective, I look at him as a known commodity in terms of a businessman. To me, it makes perfect sense that a businessman would implement policies that are friendly to business which means an opportunity for growth. This is what the financial markets are keying on this morning and with growth comes inflation and that means higher interest rates. While people who are getting mortgages may not like the prospect of higher interest rates, growth also means more jobs with more opportunities and higher wages for more people. Higher rates are a sign of a strong economy and rates have been low for so long because the economy has been week for so long. Maybe the "new norm" of low interest rates won't be the norm for long and that's not necessarily a bad thing from a bigger perspective. I would, however, recommend locking and cutting your losses. I'll be locking a client today (it's the first day he was eligible to lock or I would have locked before the elections). If your lender has a float-down option, you might be able to take advantage of it if the bond market turns after such a drastic reduction but I wouldn't count on it.<br />
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As always, feel free to contact me if I can help with anything mortgage-related. 801-893-1737 or 702-812-1214. <a href="mailto:jed.wunderli@noblehomeloans.com">jed.wunderli@noblehomeloans.com</a>. If you do float, keep a close eye on the bond market.<br />
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UPDATE: As of 3:07 EST, I am thinking the bond has fallen far enough (down 97 basis points) that if you haven't locked, you may want to float. I can't help but think there will be some rebound off of what I think is an over-reaction. As always, keep a close eye on the market.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-72335978229340928132016-11-02T10:26:00.002-07:002016-11-02T10:26:25.480-07:00The calm before the storm? FOMC interest rate decision looms as does more data...<div class="MsoNormal">
The benchmark bond rebounded yesterday and closed up just a tad (8 basis points). This morning it is down two basis points and likely won’t have much activity ahead of the Fed interest rate announcement which is likely to be a non-factor since everyone is expecting the Fed to leave rates unchanged but all of the experts are hoping for some guidance relative to the December FOMC meeting. Additionally, the ADP private payroll report was released this morning and missed big to the downside which is a slight positive for rates – it’s only slight because the report is not typically that accurate as it compares to the Non-farm Payrolls report on Friday. However, most of the ADP reports over the last handful of months have been somewhat of an indicator as to the NFP reports that followed. Hence, if a correlation exists this time, I would expect the NFP report to also be weak which would help bonds as well.</div>
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The bond is currently 10 basis points above the new 1st support level and if it breaks through the 200-day moving average it would have some room to run as long as it can also break through the 1st level of resistance at 103.19 (21 basis points above where it is now). Currently, the 2nd resistance level is at 103.51 and the other moving averages are about 10ish points above that. With a solemn report from the FOMC today and weak news tomorrow and especially in Friday's NFP report, it's possible we could see a bit of buying from the traders which would help interest rates. I'm going to switch my stance to floating with EXTREME caution which means that you should keep a sharp eye on the bond market either by downloading my app (buyerZapp - upper right-hand corner of my blog) or by contacting me if you want to know how these things are impacting rates if I don't write about it: 702-812-1214 or 801-893-1737.</div>
Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-75527220891012057972016-11-01T11:11:00.004-07:002016-11-01T11:11:45.895-07:00It's Jobs Week and the FNMA Benchmark Bond Continues Its Slide<b>It's Tuesday of Jobs Week </b>and the FNMA benchmark bond continues its slide with the October ISM Manufacturing Index coming in a bit hotter than expected at 51.9 vs. 51.7 - anything over 50 is expansionary so this is good for the country, not so good for interest rates if you are getting a mortgage and haven't locked yet. Tomorrow we get our first jobs report with ADP Private Payrolls. We also get the Fed Interest Rate decision but nobody expects the Fed to make any move tomorrow. We are hoping for some type of guidance with regard to the December meeting which is when many experts think they could make their next move with another increase; it is not a sure thing by any means as the Fed will be looking to see how the economy does between now and then as well as looking to see how the financial markets react to the elections. <br />
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Thursday we get Jobless Claims along with the ISM Non-manufacturing index (service sector) which has been strong even when the manufacturing side has been weak. Friday we get Non-farm Payrolls and the Unemployment Rate along with a couple of less important data points. The 10-year Treasury is above a key level and that isn't helping mortgage bonds but the one good thing is the RSI (Relative Strength Index) is below the oversold threshold. another good thing is that so far this morning, the 2nd level of support has held up when the bond tried to break through. One more good thing is that the bond is currently at the lowest level it's been at since June 24th - that's over 4 months. These things could indicate that bond traders might take a risk and start buying bonds thinking that there could be a little run. The other side of that philosophy is that at the current price, the benchmark bond is at a very tenuous point with not much support other than what I mentioned above; all of the moving average support levels are above the current price and would act as resistance to the bond moving progressively higher. Here's a look at the current chart:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTX1-vXdix_h4whfWweXRDAD9P8iiiidsRBsyd0JxawCgzK6kK2hT9LK6scR_i4ZFukpwD3IXCeETJo4egV_y9hLOGg-yR5KEayuI9Iw97t4Z1g8wqGaEiCl8lKJtvMFiE98J8J2eEC6M/s1600/FNMA+11-01-2016.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTX1-vXdix_h4whfWweXRDAD9P8iiiidsRBsyd0JxawCgzK6kK2hT9LK6scR_i4ZFukpwD3IXCeETJo4egV_y9hLOGg-yR5KEayuI9Iw97t4Z1g8wqGaEiCl8lKJtvMFiE98J8J2eEC6M/s640/FNMA+11-01-2016.png" width="640" /></a></div>
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In my post on 10/18, I recommended locking. Since then, the bond has sold off 49 basis points based on its current price and with all that's going on right now I will continue with my lock recommendation if you (or a client or friend) are in a position to lock; if you have to float or decide to float, keep a close eye on the market by installing my app (buyerZapp) with the link in the upper right-hand corner of my blog or you can always contact me for current information regarding bond prices and interest rates: 801-893-1737 or 702-812-1214. Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-74752226856468877732016-10-18T13:23:00.002-07:002016-10-18T13:23:20.260-07:00Mortgage Bond Market Analysis - No Data Surprises<b>It's Tuesday and we are on track for another positive day </b>in the bond market. On Friday, the FNMA benchmark bond closed down 29 basis points. Yesterday, with no economic data released, the bond recovered a bit, closing up 15 basis points. Today's data came in as expected, for the most part, and the bond continues its recovery as it is up 12 basis points. The RSI has risen just above the oversold threshold and the bond tested the 1st support level of 103.30 which is really acting more like a resistance level because it is below the threshold at 103.25 but actually got to 103.33 before selling off a bit. <br />
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<b>Economic Data: </b>The September MOM CPI came in as expected at .3% - a fairly strong reading. The core reading came in a bit lower than expected at .1% vs. expectations of .2% - this is a good showing for inflation. The core YOY came in at 2.2% vs. expectations of 2.3%. The NAHB Housing Market Index came in as expected at 63 which is very strong since any reading over 50 shows growth. <br />
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The benchmark bond may have bottomed out for now. It is currently up 18 basis points and 1 basis point above the 1st level of support, 5 basis points below the 1st level of resistance. Not sure how much higher the bond will go since the data was as expected today. Tomorrow we get housing starts, building permits and the Fed Beige Book. Thursday brings us the Philadelphia Fed Manufacturing Index, existing home sales, leading economic indicators along with jobless claims. <br />
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As of this moment, the bond is up 14 basis points. There is a lot of resistance as it tries to move higher with the 1st support level right above the current price and the first resistance level six points above that. Then you have the moving averages beginning with the 100-day that's at about 103.48, then the 50-day at about 103.58 and finally, the 25-day at about 103.68 and then you have the 2nd resistance level at 103.72. With all of this resistance, I continue my recommendation to lock on any up days. We've had a couple in a row now so if you haven't locked, this would be a great time to lock. If you do float, keep a close eye on the market. Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com1tag:blogger.com,1999:blog-5673080444366309277.post-47077760489671809632016-10-14T11:36:00.001-07:002016-10-14T11:36:29.679-07:00Mortgage Bond Market Analysis: Economic Data and Janet Yellen's Comments<b>If nothing else, it's Friday and that means lots of college football tomorrow (and probably some BBQing and just good food in general). </b>After Wednesday's fall of 30 basis points, the FNMA benchmark bond recovered most of the loss yesterday, closing up 21 basis points. Today, the bond has been on a bit of a roller coaster ride although more of a kiddie version with the range being on the narrow side with a high of 103.32 and a low of 103.09. It opened at 103.27 so it's been up as much as 5 basis points and down as much as 18 and it is currently down 13 basis points after recently seeing its high.<div>
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<b>The drivers: </b>August Business Inventories came in as expected, up .2%. September Headline Retail Sales also came in as expected at +.6%; ex-autos it was slightly better than expected at .5% vs. expectations of .4%. The PPI came in a bit hotter than expected with a reading of .3% vs. .2% expected. Both the MOM and the YOY Core PPI came in as expected at .2% and 1.2% respectively. This data is all a tad bit negative for pricing and is why we are seeing some pressure to sell. Where we are getting some support is from the October Preliminary Michigan Consumer Sentiment Index that came in much lower than expected at 87.9 vs. expectations of 91.9 - better jobs numbers don't seem to be translating into more confident consumers in spite of better retail sales this month - you may recall that they were weak last month and that the NFP from last week was also on the weak side though the Labor Participation Rate has increased. This is all a bit confounding - a word Janet Yellen used in her comments this morning.</div>
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<b>Janet Yellen's comments: </b>From the Associated Press - "<span style="background-color: white; color: #26282a; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; letter-spacing: 0.15px;">Federal Reserve Chair Janet Yellen says the slow recovery from the Great Recession has surprised economists, confounding long-held beliefs about growth and inflation. Her remarks at an economic conference may help explain why the Fed has been reluctant to raise U.S. interest rates." "</span><span style="background-color: white; color: #26282a; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; letter-spacing: 0.15px;">She says the aftermath of the crisis has "revealed limits in economists' understanding of the economy." For example, tumbling home prices reduced consumers' willingness to spend more than economists had envisioned. And a steady decline in the unemployment rate has failed to lift wages and inflation as much as expected."</span></div>
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<span style="background-color: white; color: #26282a; font-size: 15px; letter-spacing: 0.15px;"><span style="font-family: Times, Times New Roman, serif;">I would expect this dovish comments to have a positive impact but so far that has not been the case. Perhaps bond traders were hoping for more direction in her comments but there was no mention about interest rates regarding when the Fed might next raise them. They raised them last December and the stock market proceeded to take a big tumble so they are being extra cautious. We are very close to our recent lows and the RSI remains below the oversold threshold. With the election drawing near, I think traders might be a bit skittish about who will win and how that might impact the economy. The fact that China's inflation rate was higher than expected isn't helping. I would lock on any up day in the bond market and would probably not wait for an up day since the resistance seems to be stronger than the support and the support is a fair amount further down than the resistance is up. </span></span></div>
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<span style="background-color: white; color: #26282a; font-size: 15px; letter-spacing: 0.15px;"><span style="font-family: Times, Times New Roman, serif;">As always, I'm happy to help and in spite of all the college football over the weekend, I'll be available if you need me. I can be reached at 801-893-1737 or 702-812-1214. Make it a great day and a better weekend. </span></span></div>
Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-23808605156067822172016-10-11T09:36:00.001-07:002016-10-11T09:36:05.768-07:00Mortgage Bond Market Analysis - Mixed Data: Where's the Market Headed?<b>Happy Tuesday. </b>The bond markets were closed yesterday for Columbus Day but are swinging back into action today. The FNMA benchmark bond was down as much as 31 basis points before doing an about-face - it is now down only 8 basis points as the first level of support at 103.3 held strong. The flip side is that the first level of resistance (103.55) also seems to be strong as well. The RSI is oversold so there could be some buying but would it be enough to push through the resistance level? The sooner the better since the first resistance level is only two days old and may not be all that strong yet.<br />
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From a data standpoint, Non-farm Payrolls came in at 156K for September vs. estimates of 175K. This is over a 10% miss and it's also somewhat week for an economic recovery. That said, August NFP numbers were revised upward to 167K from 151K - a 10% upward revision so that helps to offset the miss. Additionally, the Unemployment rate came in at 5% which is higher than last month's reading of 4.9% and while that might be bad in some cases, in this case, it's actually a positive because of the increase in the Labor Participation Rate. Average hourly wages came in as expected at +.2%. <br />
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If you or a client / friend have a loan in process, you might want to think about locking. I'm not sure that there will be any big moves upward in bond prices which would push rates lower. There's a decent likelihood that the benchmark bond will be trading in a very tight range. You can lock now and take advantage of the great rates that still exist or you can float and if the RSI is accurate - it isn't always a great indicator - then you could pick up some better pricing if the bond trends up in the near future. As always, I'm happy to help any way I can. Make it a great day and a better week.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-53244417798661054142016-10-05T09:54:00.000-07:002016-10-05T09:54:22.655-07:00Mortgage Bond Market Analysis - Did you lock?<b>Happy Hump Day. </b>My calendar is a bit off this week since I was still on my short vacation on Monday so yesterday was my Monday and it's hard to believe that it's already Wednesday. <br />
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On Monday, September 26th, I recommended locking as I thought we were close to the top if we weren't there. I thought there was a much greater risk to a sell-off than there was potential for more significant buying. The next day gave us five more basis points, which is basically nothing as about 50 basis points is .125% in rate, and on Wednesday morning with the market opening a bit higher, I reiterated my recommendation to lock. I thought the data, as well as the fundamentals of the bond, warranted it. Let's take a look at the chart:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGF-_KdN-uz_3G34xXJgJO7tQTFyn0O96_V6ll5yxrHyrW0W1QPqM1SifNl1qn3Hi5bnzPk_wKbJxJa61e0XmwpU4r7vdPjvDSI9jmYfXobTDsR0ShtPKQnP2LHInnfvl06oR8xWXvaRI/s1600/MBNA+October+5+2016.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="572" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGF-_KdN-uz_3G34xXJgJO7tQTFyn0O96_V6ll5yxrHyrW0W1QPqM1SifNl1qn3Hi5bnzPk_wKbJxJa61e0XmwpU4r7vdPjvDSI9jmYfXobTDsR0ShtPKQnP2LHInnfvl06oR8xWXvaRI/s640/MBNA+October+5+2016.png" width="640" /></a></div>
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The FNMA benchmark bond closed down 13 basis points on Wednesday and then bounced back 4 basis points on Thursday. It closed down another 5 basis points on Friday and 6 on Monday followed by a 34 basis point fall yesterday and it's currently down 12 basis points for a total of a 66 basis point loss since my lock recommendation - this translates into an increase in rate of about .125% plus some additional costs for the new rate.<br />
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<b>The Economic Data</b><br />
It's Jobs Week and the ADP Private Payroll Report came out today and it missed expectations, coming in at 154K (on the weak side for a "recovery") vs. 166K expected. The real kicker today is the ISM Non-manufacturing Index (Services) which came in at 57.1 (very strong) and obliterated the estimates of 53; this is very bad for pricing although the ADP numbers will offset this to some extent. Additionally, August Factory Orders were .2% vs. estimates of -.1% - also negative for pricing (which means bad for rates). <br />
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<b>Where do we go from here?</b><br />
Much of it depends on the data the rest of the week with a few key data points being released including Jobless Claims tomorrow (not usually a big market mover) and Non-farm Payrolls, Unemployment Rate and Wholesale Inventories on Friday. With the sell-off, a lot of profits have been taken off the table so we could see some buying if the data warrants it. Potential buying will also be dependent upon where the bond closes today. If the 1st level of support (103.40) holds - it is at 103.46 right now - traders could have confidence that we've reached a bottom for this little run and with the right data, they could decide to buy a bit. The fact that the RSI is also approaching oversold could help. I have two thoughts, though. The first is that our high last Wednesday of 104.28 was the highest points since the bond hit 104.40 on July 6th - a day where it ended up closing down. We are now 82 basis points off our recent high and while we could see some rebound in bond prices based on reasons just mentioned, I don't expect the buying to push prices beyond recent highs. The other side of that coin is that while expectations for a rate hike are for the December meeting at the earliest, we also have the election which brings much uncertainty as does the geo-political events that are happening. Uncertainty is good for bonds since they are considered safe-haven investments. The perception of who our president will be and how he / she will do will also play a role in the decisions of traders to buy or sell bonds. For now, I would float with caution. My guess is that the jobs numbers will be on the weak side, even if they meet expectations. If you do float, make sure you are staying on top of the market in case of a quick move in the wrong direction so that you can lock quickly, perhaps before a re-price for the worse. I'm always happy to help so feel free to contact me if I can help with anything mortgage related - 801-893-1737 or 702-812-1214. Make it a great day and a better finish to your week.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-63477129314209954662016-09-28T09:40:00.002-07:002016-09-28T09:43:03.750-07:00Mortgage Bond Market Analysis - Economic Data and Janet Yellen<b>It's Hump Day. </b>In addition to it being the middle of the week, we also got some decently important data today. Durable Goods Orders was released and the headline number came in better than expected at 0.0% - expectations were for -1.4%. The other side of the cone is that last month they were up 3.6% so while we weren't negative today, there also wasn't any growth. Perhaps more importantly, was the Ex-transportation number which came in at -.4% as expected. This number is thought to be a more stable number and, thus, looked at a bit more closely and it wasn't good.<br />
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Yesterday the FNMA benchmark bond closed up for the 6th day in a row. It was up 5 basis points, 13 basis points off its high as the 2nd level of resistance (104.17) held strong with the bond closing at 104.12. Today the bond is currently down 4 basis points after being up as high as +16 basis points on the day; it is 12 BP off the low. The high levels of the day once again tested the 2nd resistance level and was once again pushed back. The more times the bond tests the level and loses, the stronger that resistance becomes and the more likely we are to see a sell-off as the next big move. In other words, we may have hit our high for this most recent run.<br />
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<b>Janet Yellen </b>is giving her prepared remarks to the House Financial Services Committee. Her remarks that have been released don't address anything about a path of rate hikes. She'll be speaking again tomorrow. There are also a number of other Fed presidents / governors sharing their thoughts this week as well.<br />
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With the RSI still in the overbought range and the euphoria of the Fed leaving rates unchanged wearing off, in addition to the 2nd resistance level holding strong two days in a row, I will reiterate what I said on Monday: Lock. I think there is much more potential for a sell-off than for any meaningful bond buying. Remember that rates / yields move inversely to price so that as bonds sell off and drop in price, rates go up.<br />
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I'm always happy to help in any way I can so feel free to contact me at 801-893-1737 or 702-812-1214. As a reminder, I'm leaving Friday for a vacation (I will have no cell service to speak of) so my next post will come whenever I get back - I may be gone all of next week and I may be back as early as Monday. Make it a great day and a better end of the week.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-36695212941334907942016-09-26T09:33:00.000-07:002016-09-26T09:33:16.451-07:00Mortgage Bond Market Analysis - Money Monday<b>Happy Monday. </b>My Utes had a great come-from-behind victory on Friday to beat USC with three great touchdown drives in a row to end the game and win 31-27. They are looking sharp on offense but a few injuries are keeping them from playing their best on defense. Hopefully we can play good enough to win the south division of the PAC-12 this year. Cal is next on Saturday at Berkeley. <br />
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As for the mortgage bond market, last Wednesday I recommended floating and we've been getting some follow-through from the Fed interest rate decision where they left it unchanged. Since then, traders have continued to buy the FNMA benchmark bond and rates have improved. It was just a slight up day on Friday with the bond closing up 3 basis points at 103.89. This morning New Home Sales came in a bit better than expected at 609 vs. 600 but below last month's reading of 659. In spite of the decent data, traders continue to buy the bond as it is up 20 basis points to 104.09 - this is 28 basis points above the 2nd level of resistance of 103.81. The five-day buying spree has pushed the RSI quite a bit beyond the overbought level. <br />
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There are a few key data points this week in addition to a number of talking heads from the Fed including an address from Fed Chair Janet Yellen on Thursday at 5:00 EDT. OPEC is meeting once again to talk about limiting production to get oil prices higher - even if they agree to do it there's no guarantee that the countries will follow the agreement. Oil is up in anticipation of the meeting. Today's chart of the benchmark bond looks like it might continue to push a bit higher throughout the day. My thoughts are that I'm not confident that the data will be all that great so traders might continue to buy throughout the week. That said, there could be some profit taking with the recent run and considering the fact that the RSI is overbought. The talking heads from the Feds will likely have a bit of an influence as well - especially if their message is different from what's expected. My recommendation is to lock if you or a client has a loan that is closing within 15 days; take advantage of this most recent run. If you have a longer time frame than that, you could float but do so with extreme caution and keep a close eye on the market so that if the market turns against you, you can react quickly to lock ahead of a potential price change.<br />
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I'm always happy to help in any way I can be it a pre-approval or a question about rates or mortgage guidelines. Feel free to contact me at 801-893-1737 or 702-812-1214. Make it a great day and a better week.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-4102592152520102312016-09-22T09:23:00.003-07:002016-09-22T09:23:50.816-07:00Mortgage Bond Market Analysis - Follow Through<b>It's Jobless Claims Thursday which means more data to draw on. </b>I'm a big sports fan and I've coached a fair amount of basketball over the years. I've also played a number of different sports either competitively or recreationally (though I'm always competitive). In about every sport I can think of, follow-through is very important in one way or another whether it's your shot in basketball, your throwing motion in baseball or football, or your swing in golf and tennis. If you don't have proper follow-through, you aren't going to have the success you want. In the financial markets, one nice day is good, but if there's no follow-through the next day, there is no real direction and it's next to impossible to have an educated guess as to what the market will do, what the <i>trend</i> will be.<br />
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From July 29th through September 6th, the mortgage bond market traded in a very tight range and there was never more than two consecutive days of buying or selling during that period and there wasn't a single day of really decisive movement. Since then, we still haven't had any HUGE days with the biggest day being a down day where the FNMA benchmark bond sold off 36 basis points on September 9th - the 3rd of three consecutive days of selling. That day was followed by alternating days of buying and selling - one each which was followed by three consecutive days of buying with the third day being the smallest gainer - 1 basis point. Monday ended that little "rally" with a sell-off of 19 basis points. Our last three days have been gains of 11 and 16 basis points and we are currently up 27 basis points in our 3rd day. We have blown through the new (higher) 1st level of resistance (103.65) and are currently 3 basis points above the 2nd level of resistance (103.81) at 103.84. With this move, the RSI is inching toward the overbought threshold and would probably reach it tomorrow with another day of buying - possibly today if we close up 40+ basis points. <br />
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<b>Mixed Data Today</b><br />
The data was mixed today with Jobless Claims (both Initial and Continuing) coming in better than expected while Existing Home Sales and Leading Economic Indicators came in below expectations with the LEI coming in at -.2 showing more weakness in the economy. <br />
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There is no data tomorrow and with a Fed rate increase thought to be pushed back at least until December, I think there a decent chance that traders will continue buying tomorrow unless they decide to take some profits before the weekend. July 29th also happened to be the last time we had a 4-day winning streak with the selling on July 30th ending that streak. For now, I would continue to float, but do so with caution. If you have a loan closing in 15 days or less, lock, otherwise keep an eye on the market so that you can react quickly should the market turn against you. As always, I'm happy to help in anyway I can; feel free to contact me at 801-893-1737 or 702-812-1214.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-36172808714035815192016-09-21T11:25:00.001-07:002016-09-21T11:25:23.686-07:00Mortgage Bond Market Analysis - FOMC Meeting<b>The Fed interest rate decision has been released and it GOOD news for rates. </b>With all of the weak data that we've had since the last meeting, it looked for a while like the Fed would likely leave rates unchanged. In spite of lots of talk immediately after the last meeting that there was a good chance of a rate increase at the September meeting, key economic data beginning the week before jobs week and extending through last week spelled doom for those (the Fed Hawks) who were hoping for a rate hike. <br />
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The latest probability from today is that there will be a rate hike in December. Of course, the actuality of this is predicated on the data and possibly other things like who's elected president. We'll be hearing from Janet Yellen and her remarks might influence the market a bit more but if what she says is similar to what she's said after recent FOMC meetings, I would expect her comments to have little impact on the market. The FNMA benchmark bond was about even right before the announcement and is now up 15 basis points at 103.56 - 6 basis points above the 1st level of resistance. The RSI is also ticking up a bit as you might expect and it is no above the oversold threshold. <br />
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I would float for now. There are a few economic data points tomorrow but I don't think any of them will influence the bond that much. I'm looking to see how we end the day and if we get any follow-through tomorrow. Keep a close eye on the market if you float so that you can move quickly to lock if the market moves against you - you can do that with my app (buyerZapp - link in the upper right-hand corner of the blog) or you can always contact me for information - 702-812-1214 or 801-893-1737. Make it a great day. Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-12307125247520349392016-09-12T13:44:00.004-07:002016-09-12T13:44:52.755-07:00Mortgage Bond Market Analysis - Video Monday<b>Excuse the hair - I just walked in from outside and it was WINDY. </b>I've got another short video for you today and while there is no data, there is some capitulation going on. Check out my thoughts and my lock / float recommendation.<br />
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<br />Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-26464278621167445522016-09-09T08:51:00.002-07:002016-09-09T08:51:51.184-07:00Mortgage Bond Market Analysis - It's Friday and it's a video<b>Here's a quick video where I share my thoughts about what's happening in the mortgage bond market and whether you should lock or float. Make it a great day and a better weekend.</b><div>
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Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-31868443504732731322016-09-08T08:40:00.003-07:002016-09-08T08:40:48.961-07:00Mortgage Bond Market Analysis - Jobless Claims Thursday<b>Happy Thursday. </b>Both Initial and Continuing Jobless Claims came in better than expected. Initial Claims came in at 259K beating estimates of 265K and previous of 263K. Continuing Claims were 2,144K vs. estimates of 2,153K and previous of 2,151K. The JOLTS report from yesterday was much better than expected, coming in at 5,871 vs. estimates of 5,643. Both of these jobs reports are in contrast to the weak jobs data from last week. Nevertheless, traders decided to sell the FNMA benchmark bond yesterday as it closed down 3 basis points after closing up 41 basis points on Tuesday. Today the benchmark bond is down again, off 14 basis points at this point in time. <br />
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The RSI is just above the mid-point between oversold and overbought and is just a bit closer to the overbought threshold. We are 13 days away from getting the Fed interest rate decision and with yesterday and today's data, I think traders are a bit more uncertain about what the Fed will do. I personally don't think an increase is justified based on the recent data we have seen, but there may be enough Fed members who are chomping at the bit to raise the Fed Funds Rate that it gets done in spite of the data. Of course, we still have a few more data points between now and then but for now, would recommend locking. I think we are going to stay in the narrow range we have been in and if the Fed decides not to raise the rate, there's a good chance we will see a breakout to the upside with the mortgage bonds and this would be good for mortgage rates. If the Fed decides to raise the rates, traders will likely decide to sell off, in the short-term anyway, which will be bad for rates.<br />
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Make it a great day.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-11419604790027949802016-09-06T07:54:00.001-07:002016-09-06T07:54:05.426-07:00Mortgage Bond Market Analysis - More Data for the Fed to Chew On<b>Happy Tuesday-Monday. </b>I love long weekends and short weeks. College football started this last weekend and that was great watching that and seeing some early upsets. I was also doing my fair share of honey-dos so a productive weekend overall. <br />
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On Friday we had weaker data than expected yet the FNMA benchmark bond sold off a bit and closed down 8 basis points at 103.64. This morning, with more weak data that gives the Fed even more reason to punt (football pun intended) at the September meeting, I would recommend continuing to float. The ISM Non-manufacturing index came in at 51.4, still expansionary but 4.3 points below the estimates and also somewhat substantially lower than recent months' readings. Couple this with a weak Non-farm Payrolls number on Friday and the contractionary ISM Manufacturing Index number of Thursday and the data is piling up in support of the Fed leaving rates where they are.<br />
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At 103.90, the benchmark bond is currently 11 basis points above the 2nd level of resistance. The RSI is trending higher and is just a bit above the midpoint in between oversold and overbought so it is not yet a factor. As for economic data / news that might have an impact on mortgage rates, tomorrow we get the Fed Beige Book at 2:00 pm EDT. Thursday will bring us the ECB Policy Statement which will give us more insight into Europe's economy and Friday we get Wholesale Inventories. As I mentioned above, I would float for now but the bond continues to trade in the relatively tight range that it's been in since July 29th. It needs to break out one way or another and the more data we get that supports the Fed not doing anything in September, the more likely it is that it will break to the upside which means lower rates. As always, if you are floating, keep a close eye on the market. You can do that by reading this blog but you can get updates throughout the day by getting my app - buyerZapp - which will provide you with real-time news that impacts rates and gives you a rate-trend meter. You can get the app by clicking on the link in the upper right-hand corner of the blog.<br />
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Make it a great day and a better week. Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-60456065961689840042016-09-02T09:01:00.000-07:002016-09-02T09:01:37.794-07:00Mortgage Bond Market Analysis - Friday Follies<b>Happy Friday. </b>Well the last of the jobs data came out today and it was a HUGE miss. Non-farm Payrolls were expected to be 180K but came in at 151K. This is quite the about-face from last month and from the ADP Private Payrolls on Wednesday. Additionally, Average Hourly Earnings were only up .1% vs. estimates of .2% and July Factory Orders were up 1.9% vs. estimates of 2% and previous of -1.5%. The Non-farm Payrolls number does not justify a rate hike this month. We will have to see how the rest of the data plays out between now and September 21st but if it's anywhere near as tame as this morning's data, I don't see how the Fed could justify raising the Fed Funds Rate. Let's not forget that the August ISM Manufacturing Index at 49.4 is contractionary which would also be an argument against a rate hike.<br />
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Next week we get the ISM Non-manufacturing Index (service sector) on Tuesday which is very important. The Fed Beige Book is released on Wednesday and Wholesale Inventories is on Friday. The following Thursday and Friday will give us the PPI and CPI respectively and the Michigan Consumer Sentiment Index. We should have a really good idea at this point of what the Fed will do the following Wednesday. <br />
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Today, however, traders are reacting a bit funny in some ways only because with weak data like this you might think that they would be buying bonds because they could be fairly confident that the Fed is not going to raise rates. The issue is that money is flowing into the equity markets pushing the stock indices higher and putting some pressure on bond prices with the FNMA benchmark bond now down 13 basis points at 103.59 after closing up 10 basis points yesterday at 103.72. I would continue to float for now since we might see some buying next week, especially if the data continues to disappoint. If you have a loan closing within 15 days, go ahead and lock since rates remain at extremely low levels. Make it a great day and a better weekend.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-69973642893544762792016-09-01T08:03:00.000-07:002016-09-01T08:03:51.762-07:00Mortgage Bond Market Analysis - Video failed me again<b>Happy Jobless Claims Thursday. </b>I recorded a video on my phone yesterday and it still hasn't finished uploading so until I get a good video camera where I can do video the right way, I'll stick to writing these posts - video will come, though, whether you like it or not. Haha.<br />
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Here's a summary of what I recorded yesterday. The FNMA benchmark bond closed down 16 basis points on Tuesday and another 7 basis points yesterday. We got our first bit of Jobs data with ADP Private payrolls and it came in at 177K vs. expectations of 175K. The previous month's numbers were revised upward from 179K to 194K. This is a decent number but I think bond traders are waiting to see how that translates into non-farm payrolls on Friday. Other data of note was the Chicago PMI which came in at 51.5 vs. expectations of 54. On the one hand, that's a pretty big miss but on the other hand, it is still above 50 which is expansionary. Finally, July Pending Home Sales blew away expectations with an increase of 1.6% vs. expectations of .6%. As of yesterday, we were still in that tight trading range that we've been in since July 29th albeit toward the lower end of the range.<br />
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<b>This morning is a bit of a mixed bag </b>with 2nd quarter Unit Labor Costs rising 4.3% (inflationary) vs. expectations of 2.1%. Non-farm productivity was down .6% as expected - there's a bit of a correlation here. The higher the productivity, the more in check the costs of labor. Here's the biggie for this morning: August ISM Manufacturing Index came in at...49.4 vs. expectations of 52. If you've studied economics or if you've read my blog very much, you know that a reading below 50 is contractionary which can hint at a recession and / or be one element that could indicate trouble. Jobless Claims came in at 263K vs. estimates of 265K so no big news there. Tomorrow we will get Non-farm Payrolls which are expected to have a much smaller number than last month, the Unemployment Rate, Factory Orders and Average Hourly Earnings. The big data point for next week is the ISM Non-manufacturing Index on Tuesday but there are some other data points as well.<br />
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The RSI (Relative Strength Index) is just above the midpoint between overbought and oversold. This is a non-issue at this point. The FNMA benchmark bond is 16 basis points off its low for the day and sits at 103.66 - up four points since the open. The focus for traders is still on the FOMC meeting and the Fed Interest Rate Decision announcement on September 21st. If we see any significant decline in the ISM Non-manufacturing number along with weakness in the jobs numbers on Friday, that might give the Fed pause to raise rates this month and traders might decide to do a bit of buying which would push rates a bit lower. I'm going to change my stance and recommend floating. That said, keep a close eye on the market (you can do that with my buyerZapp - link in the upper right corner of the blog) so that if we get data that is bad for rates you can lock quickly and hopefully beat a potential reprice for the worse. <br />
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Make it a great day. College football starts tonight with my alma mater, the University of Utah, taking on SUU in what should be a warm-up game. Game time can't get here fast enough.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-87197397557776547312016-08-29T13:33:00.001-07:002016-08-29T13:34:40.990-07:00Mortgage Bond Market Analysis - Monday, Monday.<b>It's Monday and trader's are digesting the news from the Fed Symposium in Jackson Hole. </b>Let's take a look at some data points: on Friday, the August Consumer Sentiment Index came in at 89.8 vs. expectations of 90.6; that's the lowest it's been in quite a while. This morning, we had a gaggle of decently strong data. July Personal Income was up .4% as expected and Personal Spending also met expectations coming in up .3%. Core PCE was up 1.6% YOY, also as expected. While none of these data points from today are incredibly hot, they are all reasonably strong and they certainly indicate economic growth.<br />
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Friday, after Janet Yellen's speech, traders got a bit nervous and sold off 21 basis points by the end of the day. While the FNMA benchmark bond closed 9 basis points above its low, the down day signalled some trepidation regarding the upcoming FOMC meeting in September. Today, however, is another day and traders are playing it differently with some buying going on as the benchmark bond is currently up 25 basis points to 103.76; that's 4 basis points off its high for the day and 7 basis points above the 2nd level of resistance. The RSI (Relative Strength Indicator) is approaching the overbought threshold as well. <br />
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So what does all of this mean? I would recommend locking if you or a client / friend have a loan in process that is at a lockable point. I really don't see enough upside potential to warrant the risk of floating. I hadn't verified if Jobs week is this week or next week when I did my last MBMA, but it is THIS WEEK. I rarely like floating into the release of jobs data. We get the ADP Private Payrolls on Wednesday, Initial and Continuing Jobless Claims on Thursday and Non-farm Payrolls along with the Unemployment Rate on Friday. Last month, all of these numbers were good. If we get more strong jobs numbers with other good news from the manufacturing and service sectors, I would not be surprised to see the Fed raise rates in September. In lieu of a video today, I'll leave you with a pretty picture of the current chart for the mortgage bond market:<br />
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As you can see from the chart, the FNMA benchmark bond continues to trade in a very narrow range. Usually the longer the bond trades in a tight range, the bigger the breakout will be. The bigger likelihood is for a sell-off which means higher rates and this could very well happen with strong date this week and / or next week as traders would likely anticipate a Fed Funds Rate increase at the September FOMC. If you do decide to float, please keep a close eye on the market by downloading my app from the link in the upper right hand corner. Make it a great day and a better week.</div>
Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-87394140839461823502016-08-26T07:01:00.004-07:002016-08-26T07:01:56.507-07:00Mortgage Bond Market Analysis - 08/25/2016 and I need to shave...<b>Happy Friday. </b>I actually recorded the video yesterday afternoon and for some reason it took 14 hours to upload. In any case, the information is still relevant and I plan to record another video after Janet Yellen's speech today. Check out this short 2 minute video and feel free to share your thoughts in the comment section. Make it a great day and a better weekend.<br />
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<br />Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com2tag:blogger.com,1999:blog-5673080444366309277.post-34400745885303688642016-08-18T08:25:00.004-07:002016-08-18T08:25:59.089-07:00Mortgage Bond Market Analysis - Some History and Some Prognosticating<b>It's Jobless Claims Thursday and all the data came in about as expected. </b>Before I get to the data, I want to talk a bit about recent history and share some thoughts on the not-to-distant future. In 2015 the Fed ended the Quantitative Easing program where they were purchasing $40-45 BILLION in MBS (mortgage-backed securities) every month. The law of supply and demand had many experts believing, including myself, that rates would go up since it was inconceivable that all of that buying could be replaced by the world's investors. The buying that the Fed was doing was helping to keep mortgage bond prices propped up which kept rates low - rates / bond yields move inversely to price, i.e. as prices go up, rates go down. What we didn't know then is that the rest of the world's economies were so bad and the yields offered on those economies' debt was so low that more investors started channeling money into US debt offerings, including our mortgage backed securities. While the yields aren't very high, they are higher than about all other 1st world debt and mortgage bonds are considered a safe investment. Because of this, rates have stayed at or near the levels when the Fed was buying MBS.<br />
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Throughout 2015, the Fed hawks grew stronger in their belief that the Fed should begin raising the Fed Funds rate. They were able to convince enough fellow Fed voting members to raise the rate .25% in December. Stock market investors immediately reacted with a major sell-off that resulted in a loss of an estimated $3 trillion in wealth to ma and pa investors. Since then we have seen a lot of mixed data with lots of weakness in the manufacturing sector. There have also been a few months with weak jobs data and several others that have shown very marginal growth. The trend in 2016 has shown an economy on the mend, albeit a very slow healing process. The jobs numbers aren't anywhere close to where they need to be, especially if you look at the labor force participation rate which is still hovering around a 39 year low. Manufacturing has picked up and has shown more consistent positive numbers. The non-manufacturing sector (aka service sector) which makes up about 70% of our economy has been very strong. Inflation isn't a threat - yet - and consumer confidence and spending are not always in line with each other with spending still on the weaker side than it should be for a strong recovery. What this means is that the Fed has not raised rates since their move last December and while many thought that September would be the next time that it happens, the market is saying otherwise. I think the Fed is afraid of what might happen in the equities markets if they do raise them and the economic recover really isn't in full swing - they are afraid of another December / January meltdown like what we had eight months ago. Will they raise rates by the end of the year? That's anybody's guess but it may depend on who's elected president and the market's thoughts on how the next president will do with the economy. It will certainly depend on actual results in the data.<br />
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For now, the price for the FNMA benchmark bond remains in a tight range and is just 40 basis points below the closing price of July 29th. That's not a lot of movement and there's not much to suggest a big move one way or the other. Trading right now is more about short-term profits and trying to be on the right side of the economic data. Jobs week always has the potential for some big moves since lots of important data is released AND if the jobs data shows much stronger than expected, traders could sell off in a big way. The first week of September is the next jobs week so until then, I don't anticipate a strong influence on the bond market other than the annual Fed retreat to Jackson Hole, WY. Fed Chair Janet Yellen will give her opening remarks for the summit tomorrow and, as usual, bond traders will be hanging on every word. There's a good chance she won't provide any definitive information - probably because they don't have any. For now the RSI is at the mid-point between overbought and oversold so that's a non-factor. The current bond price is right around the 25 day moving average and at 103.68, it is one basis point below the 2nd level of resistance. Initial jobless claims came in slightly better than expected while continuing claims came in slightly worse. The Philly Fed Manufacturing Index came in exactly as expected. I would lock if you or a client has a loan in a stage where it can be locked. I don't see enough upside potential to float. Going forward, my guess is that rates will remain low for probably a good while. Make it a great day.<br />
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<br />Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-40486868172077290392016-08-16T11:49:00.001-07:002016-08-16T11:49:37.593-07:00Mortgage Bond Market Analysis - What's Happening?<b>Happy Tuesday. </b>After being away for about a week and a half, I'm back from vacation and trying to get caught up. So now let me get you caught up on the economic data and how it's impacting the mortgage bond market. July Industrial Production came in hotter than expected at .7% vs. estimates of .3%. Capacity Utilization was also a bit stronger than expectations coming in at 75.9% vs. 75.6% expected. July Housing Starts came in above estimates at 1.211mil vs. estimates of 1.18mil. The July Headline CPI came in as expected at 0 while the Core CPI MOM was a bit weaker than expected at .1 vs. estimates of .2. The YOY was also slightly weaker than expected at 2.2% vs. estimates of 2.3%. The data overall is fairly strong and has caused the FNMA benchmark bond to sell of 29 basis points from its morning high of 103.79. The RSI is around the 40 mark - 30 is oversold and could be a signal for traders to buy. The bond is currently 67 basis points off the July 29th high with a downward trend. I recommend locking if you are in a position to lock. Tomorrow we get the Fed Minutes - I doubt there will be any surprise there but you never know. Thursday will bring us the Philly Fed Manufacturing Survey and the Leading Economic Indicators.<br />
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As always, I'm happy to help in any way I can so feel free to contact me at jed.wunderli@noblehomeloans.com or 702-812-1214 or 801-893-1737. Make it a great day.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-71198680253967172692016-08-08T10:17:00.000-07:002016-08-08T10:17:09.878-07:00Mortgage Bond Market Analysis - Roller Coaster Ride<b>Happy Monday. </b>I'm back to civilization after spending the last 4 days at Panguitch Lake fishing and camping with family and friends. We got rained on VERY hard on Thursday but had lots of fun and caught lots of fish and ate lots of great food.<br />
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With my computer in hand and internet service, I can share the news of what's happening with mortgage bonds. On Friday, we got the last of the jobs data with July NFP BLOWING away expectations of 180K and coming in at 255K. June's NFP was revised upward to 292K from 287K and Average Hourly Wages also came in hotter than expected as they were up .3% vs. expectations for an increase of .2%. This was all negative for pricing and the traders acted accordingly by selling off the FNMA benchmark bond as it closed down 38 basis points for the day, erasing the 35 basis point gain from the prior two days. If you've read my blog for very long, you know that I typically recommend locking before the beginning of the jobs data (or any other data that could move the market) - this is why. <br />
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This morning there is no real data to speak of and the bond was higher by as much as 13 basis points at 103.79, getting above the 1st level of resistance by 4 basis points but has sold off a bit and is now only up 5 basis points for the day at 103.71. Rates remain fantastic and if you missed your chance to lock before Friday's sell-off, your penalty isn't that bad since you can still lock a fabulous rate. There's no real reason to float, though it's probably not bad if you aren't in a position to lock or just want to see if you can get a little improvement - the RSI is below the overbought threshold and we did just have a decent sell-off on Friday. That said, if my loan was ready to lock, I'd lock and not worry about what the market does any more. <br />
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This will be my only post for this week since I'll be back on a short vacation with my family starting tomorrow and going through Saturday. In my absence, you can download buyerZapp which will keep you up to date on economic data and how it's impacting interest rates and you'll also have the interest rate trend meter. You can get the app by clicking on the link in the upper right hand corner of my blog. Make it a great day and a better week. I'll be back next Monday with more information. Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-32399042044495708512016-08-03T13:29:00.003-07:002016-08-03T13:34:50.398-07:00Mortgage Bond Market Analysis - It's Wednesday and the beginning of the jobs data<b>Happy Hump Day. </b>Wednesday is my favorite day of the week. My daughter is on a mission for a year and a half and she only gets to write emails on her Preparation Days (P-days). For now, that's Wednesday so I get to have some communication with her and hear how everything is going (she's going to Tokyo, Japan so it's a tough language to learn.<br />
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As for mortgage rates, the ADP Private Payrolls Report came out this morning and it was a bit better than expected at 179K new jobs vs. expectations of 170K. The ISM Non-Manufacturing Index missed expectations by a bit coming in at 55.6 vs. expectations of 56. This is still a very strong reading. However, the FNMA benchmark bond finished up 7 basis points after closing down 21 and 17 basis points on Monday and Tuesday respectively. The GNMA finished the day up 15 basis points.<br />
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The RSI is just above the mid-point between oversold and overbought - it's a wee bit closer to overbought. at 103.77, the benchmark bond is 2 basis points above the 1st level of resistance. It was 6 points off the high for the day but 15 points above the low. We still have plenty of jobs and other economic data this week. I would lock and be done with it just to be safe. The bond price is still quite high and traders could look to trim their holdings if the data is strong as today's data suggests it will be.<br />
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I'll be out of touch the next three days as I will be fishing in a remote area of Utah (Panguitch). I'll be out of the office next week on a little family vacation to So. Cal. but I will have access to my computer and phone so I may try to get a post up on Monday and / or Tuesday. Make it a great day.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0tag:blogger.com,1999:blog-5673080444366309277.post-11893776011093935632016-08-01T11:35:00.001-07:002016-08-01T11:35:14.908-07:00Mortgage Bond Market Analysis - The Beginning of Jobs Week<b>Happy Monday and welcome to Jobs Week. </b>In my Friday post, I said that I doubt we'd see a big move the rest of the day - the FNMA benchmark bond was up 15 basis points at the time and it end the day up 21 basis points so it squeaked another 6 basis points out for the day. I also said that I didn't think there was a lot of upside so it's a good time to lock; of course, I'm not a fan of floating into the release of jobs data so there is that peril this week if you / your client isn't locked. This morning, the bond was down as much as 21 basis points. We have seen a bit of volatility as it improved through the early part of the morning and was actually up 4 basis points at one point but is now currently down 11 on the day at 103.96 which is 2 basis points below the 2nd level of resistance. The RSI is just below the overbought threshold so that's a bit of improvement but it's expected with the sell-off.<br />
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The July ISM Manufacturing Index came in at 52.6, just below estimates of 53 but still a strong number as any number over 50 is expansionary. This is a good follow-up from Friday's Chicago PMI data which was quite strong at 55.8 and much better than the expectations of 54. On the downside (mixed data - go figure), June Construction Spending was - .6% vs. estimates of +.5%. This is a big miss and helping to support current pricing levels. Tomorrow we get Personal Income, PCE (Personal Consumption Expenditures) and Personal Spending and then Wednesday / Hump Day get's us started on the jobs data with the ADP Private Payrolls. We also get the ISM Non-manufacturing Index as well. With little reason for lots of bond buying, I think the upside is low and thus I would recommend locking. If jobs numbers are much weaker than expected then we could see some improvement which you might be able to take advantage of with a float down. That said, with the strong manufacturing numbers that we have had recently, I wouldn't expect the jobs numbers to be weak. That's all for today; I'll have another report on Wednesday and then I'll be out of town for 10 days - I'll try to get some info out but in my absence, there's buyerZapp that you can download via the link in the upper right-hand corner of my blog. Make it a great day and a better week.Anonymoushttp://www.blogger.com/profile/03435234313687137524noreply@blogger.com0