Thursday, August 10, 2017

What's going on and why does it matter?

Global financial markets remain in risk aversion mode as tensions continue to escalate between the US and North Korea. This is causing mortgage bonds to continue trading near their best levels of the year.  It's worth mentioning, however, that the rally in mortgage bonds seems to be losing strength, and that the market quickly reversed course the last time mortgage bonds traded at these lofty levels.  Even so, the Fed continues to be very supportive of the mortgage market today, with scheduled purchases of up to $1.375 billion of GNMA mortgage bonds. As for the economic calendar, wholesale inflation as measured by the PPI index came out this morning weaker than expected. There is also one Fed policymaker who is scheduled to give a speech today.

What should you do about it?

Lock your rate to be safe.

MBS Chart

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