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Posted To: Mortgage Rate WatchMortgage rates managed to scrape together modest gains for today's month-end session. In terms of the financial markets that dictate mortgage rates, the last day of the month can be a volatile day that shuns the normal cause and effect relationships between data and market movement. Today's example thankfully bucked that trend (perhaps because the rest of the month had already given us plenty of volatility). Trading levels were stable to stronger all day, allowing many lenders to drop rates in the middle of the day. 3.75% remains intact as the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios, though 3.875% is still fairly common. Lenders erred on the side of caution, in general, in that they didn't quite keep pace with the improvements in underlying markets. In other...(read more)
Posted To: MBS CommentaryVery little has changed between now and the mid-day update (read that HERE if you like). To recap, bonds started the day roughly in line with yesterday's latest levels and made gradual improvements throughout the day. That was more true for MBS than for Treasuries though. 10yr yields were locked in more of a sideways range in the morning hours and never really broke it until after the 3pm close. MBS saw more consistent improvement, albeit at a gradual pace. Data was disregarded, with the possible exception of some volatility after Chicago PMI. There were no noticeable reactions to headlines. In general, bonds just marched to their own beat, which is not uncommon on a month-end trading day. It was a good week, though not phenomenal --about the least we could ask for after the previous 3...(read more)
Posted To: Community CommentaryIn our highly interconnected financial world, what happens in Europe, Greece, and Germany greatly affects our own bond and MBS markets . There has been much discussion back and forth of who is to blame for the Greek crisis , massive debts in other Southern Euro countries and what to do going forward to solve this problem. First of all, I do lay some blame on previous Greek governments for previous massive borrowing, government corruption and also the Greek “elites” who find ways to not pay their taxes. But, I put more blame the large Northern European bankers for this crisis for making these ill-advised loans in the first place without proper due diligence. They (bankers) were pushed for these loans by the very same German and other Northern Euro governments themselves to prop up...(read more)
Posted To: MND NewsWireWhile its ultimate focus is the future of the construction equipment business, Wells Fargo's Equipment Finance division has some predictions for residential construction as well. The company's 2015 Construction Industry Forecast , presents results of a survey it has conducted for the last 19 years of industry executives representing large and small contractors as well as equipment distributorships and equipment rental companies. Wells Fargo's survey attempts to track industry optimism using what it calls the Optimism Quotient (OQ). John Crum, National Sales Manager for the Equipment Finance Construction Group said that, after tumbling to an all-time low of 42 in January 2009, the OQ has climbed steadily, reaching new highs in three of the last four years and landing this year at 130, up six...(read more)
Posted To: MBS CommentaryThe last trading day of the month has managed to be a total let-down to anyone looking for excitement. In terms of doing no further harm , it's been just fine though--at least through mid-day. That wasn't necessarily looking like the case overnight. European data and the resulting bond market weakness carried 10yr yields up to 2.052, but they saw solid support there and ultimately made it back to positive territory as the domestic session got underway. GDP data was a non-event, either because markets weren't interested or because it was right in line with the forecast (2.2 vs 2.1). Chicago PMI data was significantly weaker than expected. While that had a more noticeable effect, bonds nonetheless ran into resistance without gaining too much ground. The magic number for 10yr yields...(read more)