Mortgage rates are mostly unchanged this morning.
After a strong rally for mortgage-backed bonds (MBS’s) over the course of the past week they are currently trading lower; which could eventually pressure rates higher.
The economic outlook remains fairly bleak. This morning weekly initial jobless claims were reported higher than expected indicating that job creation remains stagnant. To boot, tech giant Cisco Systems warned investors that the economic outlook was uncertain becoming the first major corporation to formally make such an announcement.
All the uncertainty is driving investors into relatively “safe” investments including treasuries and MBS’s. In fact, yesterday’s 10-year treasury auction was met with very strong foreign demand and we’d expect the same at today’s $16 billion auction of 30-year bonds.
Tomorrow the Labor Department will release the Consumer Price Index (CPI) report. Ordinarily this report could carry some weight but lately inflationary pressure has been tepid.
Current outlook: floating