April 23rd, 2014
April 23, 2014; 9:15am
Interest rate trends: Today – Lower; 10 days – Flat; 25 days – Flat
Interest rate recommendation: Floating
Mortgage bonds (MBS’s) are doing well this morning on worse than expected New Home Sales. March New Home Sales plunge by 14.5% to an annual rate of 384,000, well below the 455,000 expected. Yesterday’s Treasury auction garnered a C- rating, not too good, and today’s $35 billion auction of 5 year notes will likely be not so good either. Mortgage bonds were fairly resilient to yesterday’s auction results, so we suspect today will be likewise. We switch to a floating recommendation while MBS’s improve, currently better by +28bps. Corporate earnings reports have been good and Apple will release their figures today after closing. Interest rates are looking good! Have a great day!