MBS MORNING: Quiet Rally

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Ahead of the FOMC there is a slight down in coupon bias....

Fn 4.0->  +0-04 to 100-17           

Fn 4.5->  +0-03 to 101-21            Gn 4.5->  +0-01  to 101-22

Fn 5.0->  +0-03  to 102-13           Gn 5.0->  +0-02 to 102-20

Fn 5.5->  +0-01  to 102-26           Gn 5.5->  +0-00  to 102-28

Fn 6.0->  +0-01 to 103-13            Gn 6.0->  -0-03  to 103-06

Its Wednesday, that means MBA Weekly MBA Mortgage Applications day...here is a portion of the press release

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 23, 2009. 

The Market Composite Index, a measure of mortgage loan application volume, was 732.1, a decrease of 38.8 percent on a seasonally adjusted basis from 1195.3 one week earlier.  This week's results included an adjustment to account for the shortened week due to the Martin Luther King Jr. holiday.

The Refinance Index decreased 48 percent to 3373.9 from 6491.8 the previous week and the seasonally adjusted Purchase Index decreased 2.9 percent to 294.3 from 303.1 one week earlier.  The Conventional Purchase Index decreased 7.8 percent while the Government Purchase Index (largely FHA) increased 8.8 percent.
 
The four week moving average for the seasonally adjusted Market Index is down 10.5 percent.  The four week moving average is down 2.1 percent for the Purchase Index, while this average is down 12.7 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 72.8 percent of total applications from 83.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.4 from 1.5 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.22 percent from 5.24 percent, with points decreasing to 1.05 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.98 percent from 4.99 percent, with points decreasing to 1.13 from 1.20 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 5.96 percent from 5.89 percent, with points decreasing to 0.06 from 0.07 (including the origination fee) for 80 percent LTV loans."

If you would like to read the full release CLICK ON ME

Not much on the economic calendar today....oh well nothing besides the FOMC Policy Statement at 2:15pm. I wrote a full commentary on the Fed meeting last night. If you missed it CLICK ON ME to read

Rate sheets should be marginally better this morning...remember the current MBS trading environment is a Day Trader's Delight. Profit takers and Originator hedging(forward commitments) will counteract the stabilizing bid provided by the Federal Reserve.