Mortgage rates are better this morning.
There is not much in the way of economic data scheduled for release this week. Therefore, most of our attention will be focused on the stock market and technical trading patters (Click HERE and HERE to understand how they can impact mortgage rates).
This morning mortgage rates are benefiting from a weaker open for stocks. Investors have renewed concerns over the financial well-being of the Euro-zone. This is causing investors to flee “riskier” asset classes for the “safe haven” of US fixed income securities including mortgage-backed bonds (MBS’s).
Speaking of US fixed income securities the US Treasury is set to deliver another $67 billion in supply this week. Given that yields ticked up at the end of last week I expect these auctions to be met with strong demand which is good for mortgage rates.
Lastly, although MBS’s took got pummeled late last week in response to the jobs report they did manage to hold technical support which is also encouraging. I still hold onto a near-term locking bias with a longer-term floating bias.
Current outlook: near-term locking, long-term float