Mortgage Backed Security Surprise

That’s the title of today’s post and no it has nothing to do with getting a present from Santa. He’s real right?

Anyway what I’m talking about is the unexpected market reversal today in the Mortgage Backed Securities market. At the open things did not look good for bonds and it appeared mortgage rates might be in for a rough day; possibly week.

But then somethign happened.

The selling stopped and investors started by bonds again. Granted we’re in between Christmas and New Years which is usually marked by low trading volume and wild reversals but todays reversal was orderly almost as if it was purposeful.

Does This Mortgage Rates Are Moving Lower:

Some mortgage lenders improved their pricing in the afternoon but nothing significant. Because it’s the time between Christmas and New Years lenders will not offer much to consumers in the way of price improvements. Noticeable consumer mortgage rate improvements probably won’t happen until next week provide these gains in the Mortgage Backed Securities market hold.

What’s Up Next:

Tomorrow the markets close early for holiday but we do have an important economic report early in the morning. Consumer Confidence is the report I’m referring to and expectations are the reading will come in at 128.2 after last months reading of 125.5.

On Thursday the market reopens and we have the weekly unemployment claims report along with the weekly Mortgage Market Index. On Friday we have a very important report; the monthly ISM Manufacturing PMI report for December. This is normally a market moving report and one to keep an eye on.

Normally the BLS Employment report is on the first Friday of the month however December’s report will not come out until next week. The market is expecting 165,000 jobs created (non-farm payrollls) and an unemployment rate of 3.5%. The lesser important ADP Employment report comes out on Wednesday and the market is anticipating the report will show 150,000 jobs created.