Looking Into This Week
For the second day in a row, mortgages are quietly drifting off the highs. Flows from originators are off to a slow start this week and it looks like liquidity is already starting to wind down for holidays. Supply will likely be light this week and with the usual demand, should keep mortgages propped up.
The EU Summit completely underwhelmed the market last Thursday and Moody’s remarks confirmed the measures were not enough; pointing out that more downgrades could be on the horizon.
Stocks were off today, but are still holding last week’s gains (DOW down 162 points). Mortgages are off a few tics, but front-month Fannie 3.5s are still trading north of 102. Tomorrow we have the FOMC and we’re only looking for minor tweaks to the statement and no change to the rate.