Mortgage rates are unchanged this morning but mortgage-backed bonds (MBS’s) are trading positive this morning for the first time in over a week!
Interest rates are benefiting this morning from weakness in the stock market. Following a weaker than expected earnings report from financial giant JP Morgan Chase US stocks are trading lower which helping to create demand for fixed-income investments, including MBS’s.
As expected Slovakia finally got around to approving the Euro-zone’s expanded bailout fund. The small Eastern European country was the final vote needed to make the fund operational. Other than that there is no new news coming out of Europe.
The US Treasury is scheduled to auction $13 billion in 30-year bonds. Yesterday’s 10-year note auction was not met with as much demand as was expected which typically puts pressure on yields to move higher.
It’s not surprising to see stocks take a breather and for interest rates to stabilize after the last week of advances. It appears for now that rates have found a new range and I will switch to a neutral position.
Current Outlook: neutral