We shifted out outlook from locking to a floating bias one week ago today. This morning we’re finally seeing better rates as they have dropped sharply.
Bankers and economists are expecting a deep rate cut in Thursday on the part of the European Central Bank. As I explained in yesterday’s rate update:
When foreign central banks cut interest rates it often creates greater demand for US denominated assets because the relative yield for US assets becomes more attractive.
Mortgage-backed bonds rallied yesterday and today and are currently trading above the 200-day moving average. If mortgage-backed bond prices can manage to close above this level it would be a VERY positive technical trading signal for mortgage rates.
Current outlook: floating so long as bond prices remain above the 200-day moving average