The week ahead ...

Forwarded exclusively by:	Bob Rosenbaum The Rosenbaum Lending Group Office: (703) 879-5200 Email: Bob@MyTalentedLender.com website: www.MyTalentedLender.com NMLS#: 649782
Monday, August 12, 2013
What Happened Last Week Mortgage backed securities (MBS) gained +0 basis points from last Friday's close which caused 30 year fixed rates to move sideways. So, for the past two weeks, MBS have moved only +8BPS which have kept mortgage rates fairly steady. Mortgage backed securities traded in a tight range and we avoided the major swings in pricing that we had in the prior week. We had light week in terms of the number of economic releases that hit the market and reports that were released were a mixed-bag. ISM Services came in much stronger than expected (56.0 vs est of 53.0) but Wholesale Inventories disappointed (-0.2% vs est of +0.2%). Initial Weekly Jobless Claims were very close to market expectations (333K vs est of 336K). So, the economic data didn't really drive our pricing last week. Instead it was Treasury auctions and Fed speak that were the major force in bond trades. We had three major U.S. Treasury auctions with the market focusing on the 10 year note and 30 year bond. Last week was all about the Fed and jobs. Both the 10 year and 30 year auctions came off weaker than their recent averages as measured by their bid-to-cover ratio but were still strong enough to keep MBS pricing up. Talking Feds: We had six different speeches by different Federal Reserve members, but few of them were voting members. Essentially, they all said the same thing: 1) the Fed needs to cut back their monthly bond purchases of Treasuries and mortgage backed securities, 2) it will most likely happen in 2013, 3) they need to see more economic improvement from the second half of this year before they move to taper and 4) they would not give a specific date for the first taper. The fact that there was no specific date for the Fed to begin tapering kept MBS at an elevated level which kept rates low. What's on the agenda for this week? Mortgage Rates Currently Trending: NEUTRAL We have a big week for economic data...but it won't start until tomorrow. MBS are moving upward this morning on speculation over the German GDP data due out this week. We only have one economic report this afternoon with our U.S. Treasury budget, and we do not have any major U.S. Treasury auctions this week. The rest of the week is packed with data about inflation levels (PPI and CPI) - these are most likely going to continue to show very tame inflation levels on a month-over-month basis. Tuesday's Retail Sales report and Friday's Consumer Sentiment Index will be the biggest reports of the week. Bottom Line: There may be some benefit to floating your interest rate and watching the market carefully. However, this is really a case by case decision and should be discussed with your Mortgage Professional. We are testing some technical resistance levels, and if we break above them it could benefit mortgage rates. If we bounce off of them though it could lead to rate deterioration very quickly. Monitor real time market data with your Mortgage Professional to stay a step ahead of lender reprices and to cash in on market gains that help mortgage rates.                                RateAlert’s Most Trusted Mortgage Lending Professionals: Loan Professions that subscribe to RateAlert Executive services have the training and market knowledge at their fingertips, along with live trading data during market hours to expertly help navigate the difficult and often times confusing process of understanding rate movements and which factors may cause volatility when considering whether or not to lock. If you’d like to learn more about what things to consider when timing the market in an effort to obtain the best interest rates, don’t hesitate to contact the person who sent you this commentary.
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