Mortgage Rate Update April 23, 2012
Mortgage rates are priced better today.
Holland and Hollande are driving interest rates thus far today.
As I wrote about in last Thursday’s ‘rate update’ the French presidential elections took place over the weekend and the challenger, Francoise Hollande, from the Socialist Party performed well. He is attracting support from French voters because he believes the country needs to focus on creating growth instead of cutting spending. His view contracts with the latest EU treaty signed earlier in the year and creates more uncertainty around the debt crisis there.
Coincidentally, the country Holland is exacerbating anxiety as well. The Dutch Prime Minister is unexpectedly resigning his position after budget talks broke down between two rival political parties. Apparently the US Congress is not the only political institution in the developed world incapable of compromise. Similar to the French political divide Dutch leaders are caught between obligations to austerity under the EU treaty and their constituents wishes for investments in growth.
When investors fret over the European Debt Crisis it helps interest rates in the US move lower via the “flight-to-quality” trade. The US 10-year treasury yield is back down near 1.90% which has proven to be a significant technical layer of resistance. In the face of $99 billion in US debt auctions & the Fed monetary policy meeting concluding on Wednesday I still believe locking is the best approach.
Current Outlook: locking bias