No Syria Strike? JUMBO!!
Syrian President Assad
My Market Watch. Bonds Down. Fixed -0.125; ARMs Unchanged; Jumbo Fixed & ARMS Unchanged. The 30-year Fannie Mae bond is trading lower this morning and is currently down -12bps but that is okay since it was down more earlier.
The bond has been selling better as the morning progresses…now up +9bps since rates were published. If the trend continues and bonds improve we could see a reprice improvement today. So, if you were thinking about locking, you might want to hold off to see how the market shakes up.
The big news is Syria…will President Obama back off and agree to a diplomatic solution? Considering news reports that the President’s approval ratings are in the tank, and that public opinion does not support a strike, and that the international community does not support a strike, a strike on Syria at this time is probably not in his best interests. That being said, I do support the White House in its objection to the use of chemical weapons, and I personally support a very aggressive response to it. Syria’s knee-jerk position to follow the Russian proposal seems to me a desperate attempt to hold off a strike. And since Syrian President Assad recently denied the mere existence of chemical weapons I think he’s full of it. But, maybe just the threat of an attack is all that the doctor ordered.
From a Wall Street trader’s perspective, a cease-fire is probably good for stocks, and bonds may suffer as a result. We need to wait and what statements come out of Capitol Hill today.
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