Rate Update July 29, 2010

Mortgage rates are unchanged today.

Stocks are trading higher in early morning trading, albeit on light volume.  Equities received a boost from better-than-expected earnings from Exxon Mobil, encouraging news from Disney, and better than expected jobless claims figures.

On the flip side mortgage-backed bonds (MBS’s) haves started the day weaker.  The main focus for interest rate watchers today is the US Treasury’s auction of $29 billion in 7-year notes.  Yesterday’s 5-year auction went very well so we don’t expect any major problems.

From a technical perspective MBS’s have traded within a tight trading range for 20 of the past 22 trading days.  Anytime we see this for a prolonged period we begin to get nervous about a breakout.  In my opinion rates have only one direction to go at this point.

Current outlook: locking