Today’s Market Update–Wednesday November 26, 2008 2:17 pm ET

Current Trend Direction: Rates Lower-Bond Prices Higher

Current Price of FNMA 6.00% Bond: 102.31, +16 bp

The 30 Year Fixed Rate is 5.125%, APR 5.214% and the                           

5/1 Jumbo Arm is 5.125%, APR 4.809%.

Mortgage Bonds have been bouncing around today. Yesterday’s Fed announcement should help to improve pricing over time.

And speaking of time, be careful if you’re trying to time this market. Locking into rates here is a safe play. Especially since prices are now trading in a very wide175bp range between support at the 200 Day Moving Average and resistance at the price highs of 2008.

Mortgage Bonds are trading a little bit higher due to this mornings economic reports.

Durable Goods Orders had the largest drop in two years 6.2% far worse than expectations of 2.5%. After removing transportation orders, Durable Goods fell 4.4%. Still not a good number.

Initial Jobless Claims came in better than expected at 529,000. The four-week average of continuing claims rose to 3.92 million, a 25 year high.

Inflation as evidenced by the Personal Consumption Expenditure Index (PCE) came in 0.0% in October; the year-over-year rate is 2.1% down from September’s reading of 2.2% year-over- year. Lower oil prices are responsible for the low number. 

Personal income rose 0.3% in October. The forecast was for 0.1%. Personal spending dropped 1% vs.. a consensus of –0.7% representing the largest decline in seven years.  This is also evidenced by the Personal Savings Rate which was 2.4% in October, an increase of 1.4% compared to September.

The November Chicago Purchasing Managers Index was 33.5, worse than expectations of 38.5. The Michigan Consumer Sentiment was 55.3 worse than expectations of 58.0.

October New Home Sales were 433,000. Worse than expectations of 450,000. However still showing signs of activity.

China lowered its benchmark lending rate 108bp to 5.58%.

The Bond Markets close at 2:00pm ET today and Friday, and will be closed all day tomorrow for the Thanksgiving Holiday. Your next update will be delivered Monday. From all of us here at North Atlantic Mortgage Corp we wish you and your family a Happy Thanksgiving.