Mortgage rates are higher this morning in response to selling pressure in the bond market. The stock market rallied at the open this morning which pulled capital out of the bond market.
Here are a couple headlines which are likely helping to boost stocks this AM:
*Retail bellwether Wal-Mart posted better than expect quarterly earnings- this is a sign that the US Consumer may not be in as bad shape as analysts thought.
*Cuba’s President Fidel Castro announced that he would step down and hand power over to his brother- it has long been rumored that once Castro stepped down tensions between the US and Cuba could thaw opening up potential trade opportunities which would be good fro business.
What to watch next?
Technically mortgage-backed bonds are trading right along the 100-day moving average. Should bonds dip below this support line then we’d expect rates to increase .125%-.375% over the next couple days. Hopefully they can hold this line.
Tomorrow the Labor Department will release the monthly Consumer Price Index (CPI) report. Should the inflation readings come in hotter than expectations we’d expect rates to rise and vice versa.