December 15, 2017

Seattle Real Estate Mortgage Rates Today 5/11/11

Seattle Real Estate Mortgage Rates Today 5/11/11: Mortgage Bonds had their monthly rollover before the open of trading today, with the effect being -25bp (.25%) for the 4.0% coupon.  As the coupon “rolls over,” this month’s coupon is closed out and all new loans are placed into next month’s coupon.  Although there is no effect on rate sheets or pricing, any candle chart patterns that may take place from the monthly rollover must be “taken with a grain of salt.”

After factoring in the monthly rollover this morning, bonds remain nearly unchanged and are off the worst levels we have seen recently.  Subsequently, Microsoft’s $8.5B purchase of Skype announcement and unrelenting growth out of China, we saw stocks on the rise.  However, we are experiencing a slight pullback of gains this morning.

There are no economic reports scheduled for release; however, the Bond Market is bracing for an important and rather large $24B 10-Year Note auction.  Yesterday’s 3-Year Note auction results were decent, but Bonds decided to “sell on the news,” and closed the day rather poorly.  If today’s auction shows weak results, it could pressure Bonds lower still.  On the other side of the coin, the Fed will be purchasing $6 – 8B in Treasuries via their Permanent Open Market Operations (POMO).  Remember, the POMO buys are set to end in June; it remains to be seen how the markets will react once the Fed stops offering the “POMO Special.”  With an overabundance of debt offered in the Treasury Auctions, a decrease in buying support could pressure bonds lower including Mortgage Backed Securities.

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