FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 31st, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.41
+22 bps (Prior Close – $100.19)

Market Update: The Mortgage Backed Security (MBS) pricing is higher this morning from Friday's close. MBS are benefiting from nervous stock investors and some worries from overseas, including sharp declines in China’s Stock market.

Economic News: The manufacturing sector measuring Chicago Purchasing Managers Index (PMI) came in right at 50, quite a bit better than last month. A reading above 50 indicates expansion, while a reading below 50 indicates contraction, so this is a fairly positive sign for the manufacturing sector. Once again manufacturing data beats the estimates; but who is buying?

Recommendation: FLOAT

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 28th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.12
0 bps (Prior Close – $100.12)

Market Update: The MBS pricing is unchanged this morning from yesterday's close after some initial up and down trading.

Economic News: The Federal Reserve's preferred inflation gauge, the Core Personal Consumption Expenditure Index, indicated that inflation remained tame last month coming in at 1.4% year-over-year. As part of that report, Personal Income and Spending were both reported inline with expectations.

Recommendation: FLOAT

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 27th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.19
-12bps (Prior Close – $100.31)

Market Update: The MBS pricing has been pressured lower by a comment from Richmond Fed President, Jeffrey Lacker, suggesting that the Fed may not need to buy the full $1.25 Trillion in Mortgage Backed Securities they have committed to earlier this year.

Economic News: Jobless claims dropped -10K lower showing a filing claim number of 570K, right on the forecasts; last week's claims were revised up 4K to 580K. In other news, revised Gross Domestic Product for the 2nd Quarter came in close to expectations.

Recommendation: LOCK

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 26th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.31
-3bps (Prior Close – $100.34)

Market Update: The MBS pricing started off trading near unchanged levels today and this comes after yesterday’s late day rally sparked by good results from the 2-year Treasury Note auction. Foreign investors, including foregin central banks, bought up a greater than expected 49.4% of the 2 year offerings.

Economic News: July new home sales; expected to increase 1.5%, as reported sales jumped 9.6% to 433K against 390K expected. June sales were revised higher also, from 384K units to 395K units (annualized). The increase is the largest month over month increase since Feb 2005. There is a 7.5 month supply against an 8.5 month supply in June.

Recommendation: FLOAT with Caution

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 25th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.06
-9bps (Prior Close – $100.15)

Market Update: The MBS pricing started off higher this morning but has since declined as President Obama announced he will re-appoint Ben Bernanke to another four year term as head of the Federal Reserve. His appointment will have to go through the Senate, and there may be some venting but in the end he will get a second term.

Economic News: At 10:00 the Conference Board released its Consumer Confidence Index; expected at 48.0 frm 46.6, it hit at 54.1 from a revised July read to 47.7. All components in the data were better than expected; current conditions and expectations were up from July. The reaction was as one would expect, mortgage prices declined and the DJIA jumped higher. In other news, the housing industry received good news when the Case-Shiller Home Price Index showed home prices rose for the second straight month.

Recommendation: FLOAT

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 24th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.00
+31bps (Prior Close – $99.69)

Market Update: The MBS pricing started off lower this morning but has since improved as talks of the $8,000 tax credit will likely be extended past the November 30th deadline and may also include buyers who are not first-time homebuyers. The US equity markets are moving higher on the reports that the global recession is coming to an end.

Economic News: No economic reports are due to be released today. There is $109B in supply hitting the Treasury markets this week which will likely add pressure to the interest rate markets.

Recommendation: FLOAT

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Aug 21st, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.00
-31bps (Prior Close – $100.31)

Market Update: The MBS pricing started off higher this morning but has since declined as stocks improved drastically. The US equity markets are moving higher on the better than expected Existing Homes Sales Report. The markets continue with their high levels of volatility.

Economic News: Existing Homes Sales were released today showing an improvement of 7.2% from the previous month at 5.24M versus expectations of 5M. This is the largest improvement since the National Association of Realtors began keeping track in 1999.

Recommendation: LOCK

FLOAT OR LOCK? Daily Market Update and Recommendation - Aug 19th, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.11
+27bps (Prior Close – $99.84)

Market Update: The MBS pricing started off higher this morning as stocks continue to recover. The US equity markets continue to fall from a much needed correction. The markets continue with their high levels of volatility.

Economic News: No economic reports are due to be released today. Traders are already anticipating tomorrow’s Treasury auction announcement. Recent trends have shown a pattern of mortgage bonds selling off with the Treasury announcements. Other economic data being released tomorrow is the weekly jobless claims, index of leading economic indicators, and the Philadelphia Fed index.

Recommendation: Float