Mortgage bonds prices are near unchanged to slightly weaker this morning holding some of the gains from yesterday afternoon. Despite some bond friendly data we are seeing prices fall a bit from the runup yesterday.
In news this morning, the consumer price index fell 0.1%, weaker than the expected 0.1% increase. The core, which excludes volatile food and energy, was unchanged, lower than the expected 0.1% increase. This was a little bit of a contrast to the core of the producer price index which was slightly higher than expected yesterday morning. The disparity could be the service component that is included in the CPI and the fact that prices often rise on the producer side before passing over to the consumer side.
Oil prices remain lower this morning. Falling energy prices generally help alleviate the fear of inflation and help rates improve while rising energy prices usually reignite inflation concerns.
Carlos Figueira - Keypoint Mortgage 