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MMG Update - Thursday, November 20, 2008 9:35am ET
Current Trend Direction: Sideways along 200-Day Moving Average for 13th consecutive session
Risks favor: Carefully Floating
Current Price of FNMA 6% Bond: $101.41, +16bp
Over the years, MMG has continued to help the mortgage community discover and understand the disconnect between the 10-year Note and Mortgage Bonds. In recent times that disconnect has been very clear to anyone in our world - but in the past 24 hours, the disconnect has been dramatic. Since yesterday the 10-year Note has risen by 285bp, while Mortgage Bonds have risen 12bp!!! Do you think the media knows this? NO. Use this to inform your relationship partners and clients of what really drives fixed rate mortgages.
So what happened? Yesterday the Fed Minutes from the October Fed Meeting were released. The Minutes expressed concern over the health of the economy and their future targets for employment and growth were lowered. But the big news was the "D" word. The Fed, after years of being concerned with inflation, now say they are concerned about deflation. This news shocked the financial markets, pushing Stocks sharply lower while directing enormous money flow into ultra-safe Treasury Notes.
(the story continues tomorrow...)
1 comment:
Home prices are extremely affordable right now and home loan rates are near historic lows. It only takes a few minutes to look at some options that fit your unique goals and situation. Call or email today to see how you can benefit from the current situation!
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