Mortgage rates moved modestly higher this morning as we had predicted in yesterday’s ‘rate update’.

Yesterday mortgage-backed bonds reversed lower yesterday on technical trading patterns as well as pressure from higher oil prices.  (Reminder: mortgage rates move inversely with mortgage-backed bond prices.)

Today mortgage backed bonds have opened up the day trading down at important technical levels.  Looking at the chart below you can see today’s bond prices trading just above the 40 & 50 day moving average lines (grey & black lines) at the far right of the chart.  If bond prices can bounces off this level it will bode well for mortgage rates.  If they dip below this level then we’d probably see 30 yr rates move back to the 6.50% level.

Fed Chairman Ben Bernanke is scheduled to speak to the world’s top central bankers at an annual symposium in Jackson Hole, WY today.  His comments always have the capability of moving the markets so we’ll be listening for him as well today.

Current Outlook: floating bias

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