Mortgage Market Commentary
Mortgage backed securities (MBS) prices are near unchanged (rates flat) as the U.S. prepared the first of three auctions for a record $98 billion of notes. The U.S. will sell $40 billion in 2yr notes today as the administration borrows unprecedented amounts to try and revive the shrinking economy. FNMA 4.5% coupon 101.86bps, -3bps. No major economic data will be released today. Stocks are lower after yesterday's rally, DOW down about 100 points. Money continues to move out of the dollar, the exit reflects concerns over monetary inflation and also increasing demand for risk. Treasury Secretary and Fed Chief Bernanke will be testifying before Congress today. Average 30yr fixed mortgage declined to 4.98%; about 234bps over the 10yr note versus 157bps five years ago.
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