Rate Update for July 9, 2008
Mortgage-backed bonds did rally yesterday which has helped mortgage rates trend lower. In the absence of any significant economic data we will be watching the stock market & technical trading patterns.
The stock market is currently trading modestly lower. Traders are trying to weigh the positive earnings news out of Aluminum maker Alcoa yesterday against the rising tensions in the Middle East.
If you haven’t heard Iran tested nine long-range missiles yesterday raising tensions between them and Israel. When geo-political tension exists it commonly causes mortgage rates to move lower. However, because this involves an oil producing nation if this conflict escalates mortgage rates could suffer due to higher oil prices.
From a technical standpoint mortgage rates rallied yesterday and are now facing overhead resistance. We favor locking in yesterday’s gains.