Morning Market Commentary - 2/20/18

In mortgages, we saw light but consistent buying from real money accounts. We also saw UIC activity by numerous accounts. Mortgages closed ~3/32nd tighter (outperform) to treasuries on the day. Mortgage originations flows saw a 14% increase day over day ending at ~$2.17bln vs. $1.90bln. 

The Ginnie2/Fannie 3.5 swap remained unchanged, 28.50pbs.  The Gold/Fannie 3.5’s & 4’s swap went unchanged remaining at 1.50/32nd and parity, respectively. At 5:00pm, the FNCL 3.5’s were up by 4.5/32nds closing at 99.25+ and FNCI 3’s were up by .5/32nds closing at 99.21. Equites ended the day mixed, the S&P 500 was up 1.02 ending at 2,732.22, the DIJA was up 19.01 ending at 25,219.38, and the NASDAQ was down 16.96 ending at 7,239.47. 

Today, the Fed reinvestment operation will purchase $715mm of Ginnie 2 securities split nearly equally between the 4% & 3.5% coupon. There are no economic data releases scheduled for today. 

Equites in Europe and Asia were both down on Friday at the close. US Equity futures are all pointing down in front of the opening bell.

Source: Fannie Mae

Michael Hess has more than 20 years of residential and commercial mortgage banking experience, serving on executive leadership teams of national mortgage banks, and managing regional lending divisions for federally chartered institutions. His Mindful Mortgage approach offers the resources and expertise of a national mortgage banker with the personal touch of a community lender. Contact him today for a stress-free solution for all of your real estate financing needs.

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