Mortgage Rates

Lock Advice 7-Day Neutral 7-15 Day Locking 15-30 Day Locking Mortgage backed securities (MBS) lost-49 basis points from Wednesday's close which caused 30 year fixed rates to move upward. MBS have now lost a big -135BPS from Monday's open to yesterday's close. Once again, we started the day selling off before our first dose of economic data even hit due to the German Sund (there version of our U.S. Treasury 10 Year note) saw their yields shoot up on continued optimism for growth in Germany and in Europe. This zapped money out of U.S. bonds which caused MBS pricing to rise. Then, Initial Jobless Claims were much better than expected (320K vs estimates of 335K) and hit a 6 year low. This is the type of data that traders think will cause the Fed to taper in September which of course pressured MBS further. enough to reverse the course of the morning's sell off.The Home Builder's Index was much stronger than expected (59 vs est 56) could count on these moving in opposite directions? They actually have been moving inthe same direction more often than not since April. This tells us that these markets are not as tethered as they once were and in many cases operate independently of each other. The stock market was under pressure due to earnings reports from CISCO and Walmart. The bond market was down due to strength in Europe,a better than expected Initial Weekly Jobless Claims report - which in turn led to great speculation about the Fed tapering in September. We had a mixed bag of economic data this morning. Both Building Permits and Housing Starts improved from their prior reading but came ina litue lighter than market expectations. These reports do not have the same impact as they did 5 years ago and probably wont until we get some readings consistently above 1M. Unit Labor Costs rose, this is not a big market mover but needs to be closely watched moving forward. Ifthis is a trend, then it is inflationary in nature and therefore negatiw for bonds longer term. Non-Fann Productivity was much better than expected (0.9% vs 0.5%). Now, normally this would cause MBS to rally. Because bonds love strong productivity levels. But offsetting this data was the fact that the prior reading of 0.5% was revised downward to -1.7%. We still have our biggest report of the day, Consumer Sentiment hdex due out just before 10EDT today. Pre-Market Status: Neutral. Overall, MBS did not really move on this morning's data. It looks like our floor of support is going to hold for the second straight trading session. It is all on today's Consumer Sentiment Index reading this morning. If we get a stronger than expected number, then it could provide enough momentum for us to break below our support level which would be ugly for your pricing. lfwe get a weaker than expected number, we could make up some lost ground from yesterday.