Mortgage rates are basically unchanged from Thursday of last week.
Although the main story-lines continue to shift the end game remains unchanged for the European debt crisis.
Over the weekend Euro-zone officials agreed on an €100 billion bailout for Spanish banks. The emergency aid will shore up the financial system in Spain but doesn’t alter the trajectory of the overall debt crisis.
As one managing director put it in the WSJ this morning, “It doesn’t really solve any of the problems; it just pushed back the day of reckoning.” The bottom line is that until Germany signs onto a plan to mutualize the liabilities of all EU countries I expect uncertainty to persist and US mortgage rates to remain low.
The US economic calendar is fairly full this week with readings on inflation, retails sales, and industrial production. In addition, the US Treasury is set to auction $66 billion in new debt supply beginning on Tuesday.
I still believe mortgage rates will remain at or near all-time lows until there is more clarity in Europe. However, as unlikely as it is a surprise announcement from a German finance officials signaling a willingness to help would certainly cause rates to shift higher.
Current Outlook: floating