Mortgage rates are mostly unchanged this morning.
There is A LOT going on in the financial markets this morning and I wouldn’t be surprised to see more volatility. With mortgage rates near all-time low levels the safe play is to lock although I can see a case for rates moving lower.
Let’s start in Europe since the debt crisis remains a primary focus for investors. In an unexpected move the European Central Bank cut short-term interest rates by .25% to help bolster their economy. However, much like here in the US, monetary policy can help prevent catastrophe but is not likely to have a major role in an economic recovery.
Next, many news sources are reporting that Greece’s Prime Minister George Papandreou will have to resign as more members from his cabinet resigned overnight.
There is plenty of drama and uncertainty surrounding Greece right now which is making it very difficult to predict the direction of interest rates.
Here in the US, the 2nd leg of this week’s employment reports was released this morning. It showed that weekly jobless claims declined last week which is raising hopes for a strong jobs report tomorrow from the Bureau of Labor Statistics. Good news for the economy is bad news for mortgage rates.
Tomorrow the all-important jobs report is due out. The markets are currently expecting about 120,000 private sector jobs for the month of October. A number shy of that figure could help rates move lower and vice versa.
The political drama playing out in Greece makes it difficult to predict but that aside mortgage rates are facing technical pressure to reverse higher and interest rates will have to battle with new US Treasury debt supply next week. That said, I still think the safe money is in locking.
Current Outlook: Locking bias in the near-term, long-term neutral