Mortgage rates are at new all-time lows this morning.
Two developments in Europe have emerged. First, a Spanish newspaper is reporting that 6 “regions” (similar to states in the US) are set to request aid from the central government. Given that the Spanish Government recently requested €100 billion from the European Union to help bailout its banking system I think its safe to say they are in trouble. Yields on Spanish 10-year notes have jumped .40% in the past week to an unsustainable 7.44%.
Second, a German paper is reporting that the International Monetary Fund (IMF) has privately signaled to the European Union that it will no longer participate in supporting Greece. Since no market exists for Greek debt this could mean that Greece could run out of money as soon as September unless another buyer enters the market.
The European debt crisis is back in the forefront. With a fairly light US economic calendar this week I expect sentiment over Europe to drive rates.
Current Outlook: floating