Locking / Floating Interest Rates - The Weekend Edition - Jan 19, 2008

ok - time to flagellate a deceased equine! (Beat a dead horse)

If you have been following my weekday blogs (links provided below), you will see that consumers should have locked for the majority of the week even though stocks were getting worse and the economic news wasn't very good. The FNMA 5.5% 30 year bond had been trading near a major ceiling of resistance and was in a rather overbought state.

The Producer Price Index (PPI) came in much lower than expected and the Consumer Price Index (CPI) came in nearer to expectations. This is rather interesting that Producers using this time to increase prices though it doesn't appear at the moment the prices are necessarily warranted.

Continued bad news from the banking industry on the Sub Prime mess caused the stock market to tank 4 out of the 5 days ending up the week 600 points down. The bond ended up 31 bps meaning mortgage rates should have improved by just about 1/4%.

Next week looks to be a slow one in terms of economic news. Jobless Claims reports will be release as well as Existing Home Sales. Neither of these will be major market movers. Look for bonds to take the lead from how the stock market performs.

Past week's advice

Monday, January 14, 2008

Tuesday, January 15, 2008

Wednesday, January 16, 2008

Thursday, January 17, 2008

Friday, January 18, 2008

To learn why one should Float or Lock -

Check out Should I float? Should I lock? & Reasons to Float or Lock