Auction Update: 7-yr note auction draws 1.890%. Sees a 3.04 bid to cover (10-auction average of 2.84) and indirect bidders taking down 50.2%. Best bid to cover since 7-yr was brought back in Q1 2009. Pretty solid auction -Treasuries and mortgages are regaining some of the ground lost during the morning trading.
Today there will be a vote in the House on the Fair Trade Act which basically will designate China as a currency manipulator. The next step is for the bill to be sent to the Senate. It is not expected to pass in the Senate, at least before the November 2 elections and the November G-20 meeting (Korea Nov 11-12).
We see this as an early warning sign that risk reward is not in your favor, Austin mortgage borrowers. Overall sentiment and economic fundamentals will continue to support a low interest rate environment but not without corrections and volatile conditions.
Part of the whip lash seems to be coming from traders reading the tea leaves of the Housing Summit. Comments by Bill Gross that Pimco wouldn’t buy a mortgage security unless the government backed it or if they did, they would require a minimum of 30% down payment. Other comments range from having FNMA/FHLMC reduce all current mortgages to 4.0% as a stimulus measure for the economy. How would you like to be invested in a few billion of 4.50% or 5.0% paper and take a hair cut to 4.0%?
Wanted to get this out quickly as a worsening Austin mortgage price change is right around the corner. As I mentioned yesterday, the risk reward of borrowers waiting to lock their mortgage rates based on expectations of better mortgage pricing are at the present, fool’s gold.
In this market, best bet for Austin mortgage borrowers is to take advantage of the historic low levels of Austin mortgage rates
Failure to rally isn’t bad, just paints the chart neutral which will cause Austin mortgage rates/pricing to stay close to current levels. Kinda like being all dressed up and no place to go.
This typically will tell us that buyers of treasuries still have the advantage but will need a little giddy up go to stay at these levels. Good time for Austin mortgage borrowers to put both hands on the wheel.
With risk reward not in your favor, Austin borrowers are advised to lock in their Austin mortgage interest rates and step aside as we’re not sure whether the light in the tunnel is the end or a train.
Treasuries and mortgage backs are starting to drift lower (higher yields/worsening Austin mortgage pricing) as an apparent deal has been made between the Prez and BP. Most likely something to do with an escrow account to pay the bills.
