Mortgage Backed Securities prices are down -9/32 far below 9:45 et pricing of +1/32, but up from a low of -12/32. Unfavorable repricing took place. Stronger than expected economic data hurt MBS markets. The ISM Services index came in at 55.4, above the consensus of 53.5. Following an 8% decline in January, February Pending Home Sales increased 8%, compared to expectations for a small decline. The Dow is up 50 points. Tomorrow, the FOMC Minutes from the March 16 Fed meeting will be released at 2:00 et. The results from the 3-yr auction will be announced at 1:00 et.
The economy appears to be improving with a reduction of unemployment numbers, the DOW gaining strength, and a modest increase in pending home sales for Feb. With this good news in the economy the fuel exists to raise interest rates which are at historic lows. Those floating rates may want to consider locking as further improvements to the economy will lead to higher interest rates.
More updates to follow....
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