Mortgage backed securities )MBS) prices are lower (rates higher) in quiet trading as the market takes a breather after a wide range of economic data released this week; FNMA 4.0% 100.05bps, down 12bps. The two major influences lately on MBS prices has been inflation & Fed purchases; inflation is expected to stay low in the near term and the Fed is likely to continue its steady MBS purchases. The stock market is mixed this morning providing little direction. Libor rates continue to fall, 3mo libor stands at 1.11% as improved earnings at banks signal a thaw in the global credit freeze and the declines are reflecting a reduction in systemic risk. Consumer Sentiment rose solidly to 61.9 from 57.3 in April, showing signs of life in the consumers attitude and offering a hint that the deepest part of the recession is over. Wouldn't that be nice. TGIF!
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