Next week will be the true test, one that we would expect will see the market trade sideways to a little better (slightly improving mortgage pricing). Overall, we think this is the low probability trade as QE2, even though it is fully priced in, is a force to be reckoned with. When the Government is the buyer of choice, most follow the ant age, “Don’t fight the Fed.”
Daily studies, however, are still a bit skeptical of the strength. If we see a strong move above 123-24, hold on, we might be in for a ride to even lower Austin mortgage rates.
Mortgage pricing is trying to work its way back from the lows of the early morning trade. We are not out of the woods yet, although I wouldn’t expect this trade session today to be very volatile facing tomorrow morning’s Employment report. From what we are seeing, the estimates are anywhere’s from 100k to 130k job losses vs the 190k number from the previous report. I am leaning more towards the -110k mark at this point. Expectations are for the unemployment rate to stay at the 10.2% previous month number, as well as avg hourly earnings and avg work week numbers to stay the same as well.
We see the selling as shallow into the later part of the week and then a rebound/rally to deliver better mortgage pricing as we close the book on July
Both stocks and bonds opened on the weak side this [...]
Bonds, notes and mortgage backs have rallied this morning as stocks take a breather from their 25% bear market pop
Bonds, notes and mortgage backs have rallied this morning as [...]