Mortgage rates are priced slightly better again today. Since March 1st I have been recommending a floating position as interest rates have responded to predictable technical trading patterns. I will shift to a neutral stance today as rates are close to hitting the bottom end of the trading range.
In addition to technical trading patterns, US interest rates are benefiting from a flight-to-safety on renewed worries about Europe. Investors are concerned about Greece’s ability to get enough private investors to voluntarily swap their Greek bonds for new holdings backed by the Euro-zone which carry a face value of less than half. A lack of participation would upset the bailout plan and possibly throw Greece into a disorderly default.
Attention will likely shift back on the US economy starting tomorrow when we’ll get the first day of employment reports. The trend for economic statistics has been good as of late an if that continues it could cause rates to reverse course.
Current Outlook: neutral