Manufacturing Picks Up

9/1/10 Mortgage Backed Securities are minus 38bp this morning. Manufacturing unexpectedly picked up in August to 56.3. This is well above the 52.9 analysts expected. Any number over 50 is considered to show expansion in manufacturing. This is a welcome sign for a struggling economy. Rates on the over hand are getting hammered. The stock markets are also cheering the news as they are rallying 236 points in early trading. Employment numbers will be released later this week and if they are positive that will take rates higher.

High impact news being released in the near future: Tuesday we will see Chicago PMI. Wednesday will be ADP employment numbers and ISM numbers. Friday is the all important monthly government job numbers.

A 35bp move usually represents a change in interest rates of .125% in either direction. Rates typically move up twice as fast as they move down.

These are the views and opinions of Douglas Lenski, President of Wholesale Mortgage Services of Wisconsin. Douglas is a seasoned mortgage professional, and derives information from daily study of market trends, mortgage publications and other industry input.