Morning Market Update
Indy and Peyton Manning decided to part ways yesterday. This marks the first time in NFL history that a team released its entire team in one day.
Mortgages continue to feel heavy this morning after weaker-than-expected weekly claims. The number of new workers filing for unemployment benefits climbed to 362k versus the consensus estimate of 352k. After topping out at 103-24 yesterday morning, FNMA 3.5s traded down to 103-17 on origination volumes of about 2.5 billion. With prepayments speeds coming in higher than expected a few days ago, the MBS roll markets are getting hit. For you, that means the price drops from 15 day locks to 30, 30 day locks to 45, etc. are getting worse.
Again, I like selling/locking down production today ahead of tomorrow’s Non-farm Payroll report. Economists estimate a +210k change in nonfarm jobs and for the unemployment rate to remain the same. If we get data significantly better, we’ll see mortgages sell off.