Rate Update January 12, 2010
Mortgage rates are improved this morning for most loan programs.
In yesterday’s ‘rate update’ we indicated the two main storylines we’re following this week are the kick-off to earnings season & US Treasury auction supply.
This morning stocks are trading lower and mortgage rates have improved slightly thanks to a poor start to earnings season (click here to understand why bad news for stocks is often good for mortgage rates). Aluminum maker Alcoa announced that their 4th-quarter earnings were worse than expected and gave a less than upbeat outlook for 2010.
Mortgage-backed bonds (MBSs) have rallied on this news but we’ll need to be careful later this morning when the US Treasury delivers $40 billion in 3-year notes to the markets. The additional supply could weigh on MBS prices.
Current outlook: floating bias