Rate Update December 10, 2010

Posted on by Evan in Rate Update

Mortgage rates are worse this morning.

After a fairly quiet week on the economic front the markets got a laundry list of headlines today.  First up, the Commerce Department reported a smaller than expected trade deficit.  The lower number is due to higher than expected US exports overseas which is a good sign for the economy.

Concerns over inflationary pressure in China were renewed this morning after the central bank in China enhanced a monetary policy tool to help curb inflationary pressure.  China’s version of the consumer price index is schedule to come out tomorrow.  Click THIS LINK to understand how inflation in China can impact mortgage rates here at home.

Lastly, the University of Michigan Consumer Sentiment report showed a more optimistic outlook for consumers that was expected.  All in all, the economic data was better than expected which is good for the economy but bad for mortgage rates.

From a technical perspective mortgage-backed bonds are oversold so I think a near-term float is the best course of action.

Current outlook: near-term floating, longer-term locking