Yesterday MBS's lost 26 bps causing 30 yr. fixed rates to trend upward.
The pull back was in part due to the economists at the San Francisco Fed released a report estimating that the asset purchases procured from QE3 only added only an estimated 0.13 percentage point to real GDP growth.
Traders view this as the signal that the Fed is nearing tapering in September since the stimulus is not meeting its targeted mark. The greater the threat of a taper, the more pressure applied to MBS's and therefore, an increase in mortgage rates.
Today, MBS's started the day off with a 36 bp sell off before the first US economic report was even received. This sell off was due to yesterdays momentum that was driven by the fear of tapering and the better than expected Sentiment data out of Germany.
MBS's are trading in the proper range and looming concerns of the taper, coupled with growth in the US and German economies has weighed heavily on bond pricing.
Contact Specialty Financial Services, Inc. for rate lock advise and a free consultation today.
www.specialtyfinancialmtg.com
- Michael Corboy
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