Mortgages rates have rallied sharply in response to falling oil prices and growth concerns about China and the euro zone to start off 2015. Originator supply has increased by +$400 million per day from the year-end week. This week is opening up with better risk tones despite oil prices dropping again overnight and on prospects of ECB stimulus and M&A activity. In addition, the unexpected announcement from the White House last week on the 50bps cut in the FHA annual mortgage premium left analysts wondering if changes were coming to the conventional market. On the economic calendar, data is light today however it ramps up mid-week. As trading moves through the morning, the 10-year Treasury note is higher +2/32 (1.941% yield) as prices on the MBS FNCL 3.5s through 4.5s are down -1/32nds to -3/32nds. The Fed’s sole purchase operation this morning is a GNII 3s and 3.5s at a $800 million max. Over in equities, U.S. stocks again fell after the S&P 500 posted its first back-to-back retreat since October. Energy led the way with -3% as crude oil dropped another -4.6%. Markets are trading volatile with oil as investors still are unclear as if dropping oil prices are positive for consumers and the overall economy or if it’s leading to larger financial stress. On the score board, the DJIA drops -0.26% at 17,691 as the S&P 500 retreats -0.51% at 2,034. Overnight, markets were trading mostly up despite oil concerns as Europe and Asia both posted gains. Marcus Lam Secondary Marketing Opes Advisors, Inc.
Posted on: Mon, 12 Jan 2015 17:57:23 +0000
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