Rate Update May 4, 2010
Mortgage rates are better this morning.
Volatility is definitely back in the market. After mortgage pricing worsened yesterday on news from the EU that a rescue package for Greece had been agreed upon peripheral countries (i.e. Spain and Portugal) are now creating more fear in the marketplace.
We’ve referenced many times in the past couple weeks the impact that credit defaults overseas has on domestic interest rates. If you want to learn more about the “flight-to-quality” effect then please read THIS LINK.
US stocks are down this morning which is helping to drive money into the bond market. The additional demand is helping to drive yields lower.
There were a couple economic data points released earlier today. Both came in better than expected but have had no impact on the markets as traders are solely focused on the EU.
We’ve still got a busy week ahead. In addition to monitoring the EU situation we’ll be waiting for the monthly jobs report on Friday.
With such a strong turn around in the market today we have to recommend a floating position.
Current outlook: floating