FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Sept 3rd, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.75
-12 bps (Prior Close – $100.88)

Market Update: The Mortgage Backed Security (MBS) pricing is lower this morning from yesterday, with strength in Asian markets last night money has started to flow out of Bonds.

Economic News: The Labor Department says the number of unemployed workers filing for jobless benefits fell last week by 4,000 to 570,000, but that was less than the 560,000 figure the market had been expecting. Overall, the report indicates that the labor market is still declining. This comes ahead of tomorrow's official Jobs Report, which is the best measure we have of real-time job creations and losses. ISM services sector hit at 48.4 frm 46.4 in July; generally on target.


Recommendation: LOCK

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Sept 2nd, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $101.03
+38 bps (Prior Close – $100.66)

Market Update: The Mortgage Backed Security (MBS) pricing is higher this morning from yesterday, thanks in part to the recent pullback in Stocks.

Economic News: The ADP Employment report came in worse than expected showing 298K job losses in the private sector, worse than the 200K expected. Also this morning, Revised Productivity for the 2nd quarter beat expectations and showed the largest gain in nearly six years. This emphasizes that businesses are maximizing output from their current staff. These better efficiency gains help to keep inflation low, which is good for Bonds.

Recommendation: FLOAT

FLOAT OR LOCK? Daily Phoenix Interest Rate Update and Recommendation - Sept 1st, 2009

Current Pricing of FNMA 30 Year 4.5% Bond: $100.53
+6 bps (Prior Close – $100.47)

Market Update: The Mortgage Backed Security (MBS) pricing is higher this morning from yesterday's close. MBS are benefiting from nervous stock investors, as September is typically one of the worst trading months of the year.

Economic News: Pending Home Sales rise 3.2% in July versus estimates of a 1.5% increase. The Institute of Supply Management Index also beat estimates coming in at 52.9, better than expectations of 50.2. A reading above 50 indicates expansion, while a reading below 50 indicates contraction, so this is a another positive sign for the manufacturing sector.

Recommendation: FLOAT

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