High Mortgage Rate Volatility

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Today's Rate Volatility: HIGH What happened yesterday? Mortgage backed securities (MBS) lost -35 basis points from Tuesday's close which caused 30 year fixed rates to move upward. This was the second straight day of a sell off of -35BPS. The U.S. Trade Balance came in at -39.1B vs est -38.7B, which is a little higher than expectations and June was revised upward slightly but still at a very decent level. This was slightly positive for MBS pricing in the morning. But MBS started to sell off around 11EDT on news that Sen. McCain had withdrawn his support for Obama's plan for Syria. Then, we got news that the Syrian Defense Minister defected to Turkey. Both of these events caused MBS to lose their "fear factor" premium from concerns that we would launch a strike against Syria. MBS sold off further at 2:00EDT after the release of the Fed's Beige Book. In it, there were some bright spots across all regions and showed some gains in manufacturing, housing, and the labor market. This caused traders to speculate that the Fed may have some of the more current and recent data that they have been looking for to justify a tapering of their bond purchases at their September 18th meeting. Auto Sales cracked the 16 million mark for the first time in a long time. Not only have mortgage rates been going up but so have auto rates. And the fact that auto sales are improving in the face of higher rates has given some traders reason to think that the Fed may see this as proof that the economy can handle some higher rates and still continue to grow. What is on the agenda for today? Don't miss out on the mortgage industry's premiere insight and commentary. Subscribe to RateAlert Executive today and get today's lock advice, complete market commentary and forecast for today, and watch the full Morning Coffee Update video with Bryan McNee - all available only to our Executive subscribers.