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