Last week
MBS lost - 78 basis points causing the 30 year fixed rates to move higher.
MBS were
under pressure all week (which drives mortgage rates upward) on three factors:
First, we had some very strong economic news with ISM Manufacturing and
Servicing, Auto Sales and a positive tone in the Fed's Beige Book. Secondly,
the bond market reduced some of its "fear factor" premium as news
stories made it clear that a U.S. strike against Syria would not occur during
the week. And lastly, bond traders were betting that Friday's employment
data would be stronger than expected.
All of
which caused mortgage rates to hit their highest levels in three years.
And
then the much anticipated Non-Farm Payroll (NFP) data hit on Friday.
This
weaker than expected jobs data caused MBS to reverse course from the week-long
sell off and regained some of their losses. This helped mortgage rates
improve from earlier in the week but we still closed down for the week.
This week we have another big week for MBS
trades. Not only do we have some very important economic reports, but we
also have a huge supply of Treasury auctions to contend with, a Congressional
vote on Syria, a monthly bond coupon roll over and this is the last week before
the next Fed meeting.
MBS have
made some more gains this morning and we may see a temporary improvement in
pricing on Wednesday after the Syria vote. If we vote to attack MBS will
spike and your pricing will temporarily improve. This will override any
economic news for the week.
Stay on top of this weeks events by remaining in constant correspondence with a Mortgage Professional who has access to live MBS pricing.
- Michael Corboy
www.specialtyfinancialmtg.com
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