Mortgage Rate Update February 1, 2011

Mortgage rates are priced worse this morning.

Solid expansion in manufacturing activity has put pressure on rates to move higher.  The Institute for Supply Management released their monthly index on manufacturing activity this morning and it showed expansion for the 6th straight month.

Stocks like the news and are starting the day higher which is putting pressure on mortgage rates to creep higher.

Peaceful political demonstrations continue for an 8th straight day in Egypt.  The Egyptian military has announced that as long as protests remain nonviolent they will not crack down.  At this point economic disruption caused by the protests has been contained to Egypt’s borders.  Should it expand I would expect mortgage rates to drop.

Beginning tomorrow I expect the markets to position itself for Friday’s jobs report.  I will switch my position to neutral.

Current outlook: neutral