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Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Rate sheets likely to be a bit worse than Friday, but not too much. Reprice risk on the day is moderate, we could see mortgage bonds lose ground on the day despite there being no economic data. There’s a 3yr Treasury auction this afternoon, but that won’t matter to bonds. I’m still in a locking bias, for now, because I don’t think the CPI inflation data or Fed meeting next week is going to ultimately end favorably for rates and that rates will creep higher on the way there. However, I could move to a cautiously floating stance as the week goes on, and loans that are willing to gamble may consider floating into the CPI report on Wednesday and next week’s Fed meeting after that.
Loans closing in less than 15 days should strongly consider locking. Not sure why anyone in this window would still be floating, as we’ve seen rates creep higher after falling a little over a week ago. I don’t think that we are going to see any kind of big rally when the CPI data comes out, in fact I think it could push bonds lower and rates higher.
Loans closing in 15-30 days should consider locking. Loans in this window could arguably be helped with this week’s inflation data or next week’s Fed meeting… or could look back and wish they had locked now. There is just too much of a chance that it will be the second one… lock ’em.
Loans closing in 30+ days have the least urgency to lock (but should still lock), with both the CPI inflation data and the Fed meeting happening within this window… and either (or both) could arguably end up being good for rates. But without clearly knowing where things will go from here, locking is probably a good call unless the loan is very risk tolerant and wants to gamble.
Technicals:
The UMBS 6.0 coupon is at 99.81, dipping back below that 100 mark and falling.
The 10yr Treasury yield at 4.28.
