EXAMPLE OF AVAILABLE CLIENT COMMENTARY
Daily Market Commentary



Mortgage Market Index W/E -
Actual 505.3 vs Previous 532.1

MBA Purchase Index W/E -
Actual 262.6 vs Previous 268.3

MBA Mortgage Refinance Index W/E -
Actual 1958.7 vs Previous 2094.1

MBA 30-Year Mortgage Rate W/E -
Actual 3.98 vs Previous 3.98

Crude Oil Inventories @ 10:30am
2-Year Note Auction @ 11:30am



The late January illiquid trading environment continues. Currently, the market is just flat out struggling and the direction is down as the selloff in the bonds continues coming into the end of the calendar year. Fannie 3.0% MBS are down 8/32nds (101-03). The broader trend is definitely pointed toward higher yields so beware of a negative pricing risk if the market continues its downward slide. Expect a bumpy ride into the end of the year with little chance of any strength until January.


10-Year yields are currently up 3.1 basis points to 1.906.As stated previously, FNMA 3.0% MBS are down 8/32nds (.25) to 101-03 (101.09375). GNMA 30-Year 3.50%, interestingly enough, are up on the day by 3/32nds to 102-31 (102.96875) and are clearly outperfoming GNMA 3.0% and 4.0% MBS, down 7 and 3/32nds, respectively.


(Note the FNMA 3%, GNMA 3.5% and 10-Year Treasury weekly charts below).





FNMA 3.00% MBS



MBS, almost across the board, continue their downward (in price) trend as we head into the end of the calendar year. The trading books are mostly closed for the year and liquidity has dried up so do not expect anything different until we get to early January.



GNMA 3.50% MBS



GNMA 3.50% MBS seem to be the loan exception to the current trend and are up slightly on the day. Clearly there is some buying happening in the 3.50% coupon GNMAs, but don't expect this to continue as this coupon will undoubtedly join the rest in their march downward before too long.



10-Year Treasury Yield



The yields on the 10-Year treasury continue their march higher as we hit the highs of the week. Expect continued weakness into the end of the year.



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