Rate Update June 15, 2009

Fixed Mortgage Rates are even with Friday.

Mortgage Backed Bonds are continuing to gain some ground in the market this morning as they are already trading over 60 basis points higher.  It is unfortunate however that lenders have been taking time to decrease interest rates in the same manner in which they raised interest rates when bond prices were falling the previous weeks.  Mortgage Backed Bonds are currently up against the 200 day moving average, which could stand as a pretty strong level of resistance. 

A couple items that may help bonds this week however is that stocks are also against a 200 day moving average, so if there is a pull back in stock prices at this level…we may see money flow from the stock market into bonds.  Also helping bonds this week could be the absence of a large auction in Treasury bills other than the normal scheduled auction.  For now, we can cautiously float but if bonds look like they will retreat from this 200 day moving average, we will want to lock in the small gains we have seen in the past couple days.   

Current Outlook: Very cautiously floating