The benchmark FNMA 5.5% mortgage bonds did claw back from an earlier nearly 60bp deficit to close with a meager loss of just 12bp at $101.19.  Earlier gains in the stock market weighed heavily on bond pricing, although a spike in commodity pricing was responsible for most of the day's downward pace. 

The bleak Jobs Report continues to flame recession fears in the US prompting investors with long-term views to position their money in markets they hope will counteract risks associated with a recession, a lower US dollar, and inflation.

Merrill Lynch believes the worst of the credit crisis is over and Washington Mutual is set to get $5 billion injection. 

I look forward to the pricing tomorrow and just to keep you, the gentle reader, in the loop many FHA lenders are putting a score limitation on their FHA guidelines with a minimum of a 580 score needed. 

Dave Woodson

www.indigofg.com