Mortgage rates are modestly better this morning.
Despite $109 billion of new debt supply from the US Government this week mortgage rates are managing to start the week better off. The US Treasury will kick-off the week with $10 billion in inflation protected 5-year notes. If demand for US debt is weaker than expected like it was two weeks ago we could see rates get pressured slightly higher.
The markets continue to focus on the Fed’s next round of quantitative easing known as “QE2”. We are now 9 days away from the Fed’s monetary policy statement which will draw much attention from the financial markets. Until then I expect rates to remain steady even though it is a relatively heavy week for economic data.
Current outlook: locking in near-term & floating long-term