Despite interest rate friendly economic news this morning mortgage rates have not managed to move lower.
This morning the Labor Department reported that prices at the wholesale and manufacturing levels of our economy declined by more than expected last month. This inflation friendly news would ordinarily help mortgage rates move lower.
However, mortgage-backed bond (MBS) prices are battling tough technical trading signals & a reversal in the stock market. Currently, MBS prices sit just above the 200-day moving average. This is a critical technical trading level. Should MBS prices manage to pull away we are likely to see rates move even lower.
However, we wouldn’t be surprised to see MBS prices reverse lower in response to technical trading; especially if stocks can sustain a rally this afternoon.
Current outlook: float as long as MBS prices remain above 200-day moving average; as soon as they drop it’s time to lock!