Wednesday, August 26, 2009

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

No comments: