Mortgage Rates in a Tight Range

Mortgage rates are being quoted in a tight range.  A weaker open in the stock market is improving the bond and mortgage markets this morning.  The DJIA opened down 60, NASDAQ -20 and the S&P -8. The bellwether 10yr note found support at 2.80% but still driven by the stock market.  Most all global stock markets were lower setting up the weak US open.  The current concern in equity markets, globally and in the US is worries that China’s economy is slowing. Monday China reported a decline in its exports, suggesting a slowdown caused by slowing global markets, especially in emerging economies.  China announced last week an economic growth target of 7.5%, the weakest since 1990, and saw its first onshore bond default after a solar-panel maker failed to make an interest payment.  Tomorrow China will report its industrial production, traders expecting a decline.

Ukraine's interim Prime Minister meets with President Obama and John Kerry in Washington today..  This situation is likely to go on for months, but still isn’t directly effecting markets as it did in the previous weeks.

There is no economic news for today.  Taking a wider look at the interest rates - the 10yr is swinging back and forth on each data point.  The US stock market is increasingly more vulnerable to soft economic reports here and globally.  After the 2013 explosion in stocks the equity markets are in a consolidation phase awaiting more data where weather isn’t an issue.  The 10yr has very solid support at 2.80% as we have noted this week – but we do have resistance at 2.70%. Mortgage Backed Securities (MBS) prices are tied into a 100 basis point price band, leaving the rates on a 30yr mortgage rate for an ideal situation being quoted in a tight range of 4.375% to 4.5% for the past few days - depending on discount points.   We are essentially neutral toward the outlook as are most traders these days.  In the longer outlook we are bearish toward the economy and therefor slightly bullish on interest rates.

Remember, if you want to know the benefits of locking your rate today versus floating, simply give me a call at 314-744-7806 or visit me on my website at www.CallTheMoneyMan.com   I have access to real time Wall St. data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.