Mortgage rates are mostly unchanged this morning.
Earlier this morning it looked as though mortgage rates would open higher on news out of Europe that the financial system was stronger that previously expected. The European Central Bank reported earlier today that demand for ECB loans was less than expectations leading investors to believe that banks in Europe are not in bad as shape as was thought to be the case. On the news stocks in Europe traded higher reducing demand for the “flight-to-quality” trade.
However, that enthusiasm was muted when ADP released their version of the monthly jobs report. Their numbers showed that only 13,000 private sector jobs were created in the month of June which means Friday’s jobs report from the Bureau of Labor Statistics could be ugly. Friday’s jobs report is one of the most important in terms of driving the financial markets so traders are repositioning their investments based on this morning’s report.
I remain in a neutral position only because momentum appears to be on our side. However, from a technical perspective mortgage rates appear ripe for reversal back higher.
Current outlook: neutral