Mortgage rates are better this morning.
Stock markets around the world traded sharply lower today (Japan: -2.3%, Hong Kong: -4.2%, India: -2.2%, Paris: -4.0%, Germany: -2.6%) which is encouraging investors to seek safety in “safe” US fixed-income securities. The cause? European debt fears.
It’s no surprise that Greece will likely default on its government debt but where the uncertainty lies is just how far the dominoes will fall. French banks are currently the primary target as investors scale back their exposure to European financial institutions for fear that they will become insolvent if Greek debt becomes worthless.
Interest rate improvements may be short lived however because the US Treasury is scheduled to deliver $66 billion in new debt supply this week. The additional supply will likely curtail any gains in the early part of the week. A heavy dose of economic news is due out Wednesday and Thursday.
Current Outlook: neutral