Mortgage rates are unchanged today.
The Spanish Government attracted greater demand than was expected earlier today in an auction of T-bills and notes. The markets are interpreting this as a sign that maybe the crisis is not as bad as previously thought. The yield on the 10-year Spanish note is back below 6.00% and that is putting pressure on US interest rates to rise.
Here at home a mixed bag of economic data is failing to draw much attention. On one hand US home building construction fell sharply last month according to the Commerce Department. However, when you strip out multi-family construction the number was not as bad. On the other hand new permits for new construction rose by more than expected. In a separate report US industrial production & capacity were reported in line with expectations.
The stock market is entering the meat of earnings season with big corporations releasing Q1 results and forward forecasts almost daily. It’s important to consider the impact that the stock market can have on mortgage rates (when stocks are up rates continue to climb and vice versa). I expect sentiment on Spain and US stocks to drive mortgage rates the rest of the week.
I am going to shift to a neutral position.
Current Outlook: neutral