Weekly Mortgage Overview: 4/27/2015

By April 27, 2015Mortgage Overview

Mortgage  Backed Securities (MBS) Overview

The stock market (DJIA -42.17) closed down as MBS and stocks once again moved in the same position.

There was no domestic data but there was a 2-year Treasury note auction. MBS did briefly improve on the auction results but could not hold on to their gains. Auction results: $26 billion with a high yield of 0.540%. The bid to cover ratio was 3.30 which was a tad lighter than last auction’s 3.46 ratio but it was still very strong. Dealers had heavy demand and snapped up 47% of the share.

Tomorrow we get a very important Consumer Confidence Report and the 5-year Treasury auction. Plus the FOMC starts two days of meetings.

Across the Pond

Japan: Fitch downgraded their debt (bonds) from A+ down to A. This has foreign money that only be invested in the highest rated bonds shifting to the U.S. and will keep rates low today.

China: There are a growing number of reports hitting the wires that the Peoples Bank of China (PBOC) is discussing direct purchases of local government bonds as a form of QE.

Gexit: Faced with massive pension payments that are due as well as interest payments due to the IMF, Greece has frozen the accounts of “small debtors” and the Greek Prime Minister is changing up his negotiating team that has been hapless in talks with the EU and IMF.