| Loan Program | Up to $417,000 | $417,001 - $601,450 | $601,451-$1,000,000 |
| 30 yr Fixed Rate | 4% APR 4.076% | 4.125% APR 4.181% | 3.75% APR 3.791% |
| 15 yr Fixed Rate | 3.125% APR 3.258% | 3.5% APR 3.616% | 3.5% APR 3.580% |
| 5/1 Adjustable Rate | 3% APR 3.132% | 2.875% APR 2.931% | 2.875% APR 2.918% |
Single family, owner occupied, 80% loan to value, 740 or better fico
Current Trend Direction: Sideways, trying to stabilize
Advise Your Clients: Carefully Floating
Current Price of FNMA 3.5% Bond: $103.47, +9bp
After last week's volatility, Mortgage Bonds are trading near unchanged as traders look ahead to the next big event, the Fed meeting.
The two-day Fed meeting kicks off next Tuesday the 15th and ends on Wednesday with the monetary policy statement at 2:00pm ET. Fed Fund Futures show an 80% chance of a Fed Fund Rate hike next week, most likely a 0.25% raise. In the absence of a surprise negative shock between now and then, it looks like the Fed must raise rates or lose credibility since they have been signaling a go.
There are no economic reports due out until Thursday's Weekly Initial Jobless Claims data. The Treasury will be selling $24B 3-Year T Notes tomorrow, $21B 10-Years on Wednesday and $13B 30-Year Bonds on Thursday.
The Monthly Bond Rollover will take place after the close of trading tomorrow.
Oil prices continue to edge lower, after OPEC decided not to cut production last week. Prices are now below $40 a barrel as supply continues to rise. Economics 101, says when supply outpaces demand, prices must fall.
Technically, Mortgage Bonds continue to try and stabilize after last Friday's impressive rebound. With Stocks lower, advise clients to carefully float, and get prepared to lock once again should prices approach the 200-day Moving Average.
