We see the set up as neutral, given a multitude of bearish divergences on one side and Fed Chief Bernanke and his dollar printing press on the other. Throw all the factors together and you can make a good case for the market and Austin mortgage pricing to stall unit early November’s elections and FOMC meeting.
Text book trading here as this baby is tracking the down trend line like a hunting dog. Good news is that we are at good support mentioned this morning. Play defense, Austin mortgage borrowers, as the light at the end of the tunnel is not the other side.
13 billion of 30 year bonds just hit the tape. Yield 3.852% with a whopping 3.2 bps tail. Indirect Bidders and Direct Bidders took 41% of the auction, leaving the street to mop up nearly 60%. Bid to cover stunk at 2.47 to 1. Overall, this was not a dog but a pack of them. Give it a D just because we hate to fail anybody. Bonds, notes, and mortgage backs are trading fast market conditions with the 10 year off ½ point and the bond down over 1 point. MBS now off 5 to 7/32’s.
Currently, the best bet for Austin mortgage borrowers: don’t take historic low Austin mortgage rates for granted.
This is a time for Austin mortgage borrowers to be careful. Take advantage of any rally the market gives you and get on the bus before it leaves the station.
Price action post auction has not done anything to help Austin mortgage pricing. Sell side orders are still on the heavy side with MBS still off 15/32’s. As I mentioned earlier, we don’t see this as a major trend change or a sentiment shift towards the bears.
With that in mind and the fact we’re trading at or near historic low yields, best bet is for Austin borrowers to lock in today’s great Austin mortgage rates and move on down the road.
We will continue to trade the small range that has been with us for a couple weeks now, swinging from high to low, low to high depending on stocks and ‘headlines”. Nothing huge here as we see Austin mortgage rates remaining low well into the third quarter.
This morning, bond prices are a touch higher following the weekly jobless claims data release. Initial unemployment claims fell to 444k in the week ending May 8th, down from an upward revised 448k. Economists had expected claims to drop from the previously reported 444k to 440k. Initial claims of 444k were a touch higher than estimates, but still a mere 5,000 above the year's low and at the bottom end of the range which has persisted throughout 2010.
Last month’s auction however was a disaster with only 23.9%. Technically, we’re right up against the down trend line. This is where the battle of bulls and bears will take place and the weapon of choice seems to be the 30 year bond auction outcome (12:00 cst).
