Mortgage Rates Struggling
After the rout last Friday the bond and mortgage
markets, mortgage rates continued to struggle today even though there was no
new economic news to digest, and this week doesn’t have a lot to think about.
The 10yr yield was up a bit then moved to settle at 1.98%, with the MBS
up all day, before they ended in negative territory. Job gains looking
good on the headline but the quality still is a concern for the Fed, too many
part-timers and/or low paying work that understates workers’ capabilities.
Greece is still a key problem for the EU. The impasse there is pushing Greece closer to the brink of default and potentially even a forced exit from the currency union—an outcome that global financial leaders fear could fracture the Eurozone and tilt it back into recession. For the moment the markets are now digesting what may or may not happen as the crisis unfolds, but somewhat more relaxed than a few weeks ago. The fat lady has not sung on this issue.
For all of the forecasts and outlooks, there is no solid consensus on when the Fed will move to begin increasing interest rates - lots of very strong arguments for both delays and for moving quickly.
Ukraine back on the front page recently as fighting has escalated to the fieriest so far. So far markets are keeping a close eye on the situation but we have not noticed any direct impact to any markets at the moment.
In the Mid-East, the situation is deteriorating almost daily, with it being the elephant in the room - ISIS getting stronger each day and now Jordan may be dragged into it. We deem the situation much more seriously than markets do at this time. The entire region is a pot beginning to boil-up. Iran with the bomb at some point, outwardly saying it will wipe Israel off the map and various factions choosing sides is a very concerning situation.
In summary, we saw some hesitant, tepid gains in bond markets today, followed by losses in the afternoon. This is somewhat disappointing after last week's slide. Rates are still great, historically, but borrowers who got quotes last week and failed to act may not feel that way. For now, I am telling customers to hold their ground. The 10yr was testing its 40 day average today - holding but we are not willing to trade against what is presently a bearish bias. Volatility down today but not dead, markets will continue the extreme volatility on any unexpected news. The big question is, do we go up, or down, from here. My crystal ball is broken today, so no idea here.
Greece is still a key problem for the EU. The impasse there is pushing Greece closer to the brink of default and potentially even a forced exit from the currency union—an outcome that global financial leaders fear could fracture the Eurozone and tilt it back into recession. For the moment the markets are now digesting what may or may not happen as the crisis unfolds, but somewhat more relaxed than a few weeks ago. The fat lady has not sung on this issue.
For all of the forecasts and outlooks, there is no solid consensus on when the Fed will move to begin increasing interest rates - lots of very strong arguments for both delays and for moving quickly.
Ukraine back on the front page recently as fighting has escalated to the fieriest so far. So far markets are keeping a close eye on the situation but we have not noticed any direct impact to any markets at the moment.
In the Mid-East, the situation is deteriorating almost daily, with it being the elephant in the room - ISIS getting stronger each day and now Jordan may be dragged into it. We deem the situation much more seriously than markets do at this time. The entire region is a pot beginning to boil-up. Iran with the bomb at some point, outwardly saying it will wipe Israel off the map and various factions choosing sides is a very concerning situation.
In summary, we saw some hesitant, tepid gains in bond markets today, followed by losses in the afternoon. This is somewhat disappointing after last week's slide. Rates are still great, historically, but borrowers who got quotes last week and failed to act may not feel that way. For now, I am telling customers to hold their ground. The 10yr was testing its 40 day average today - holding but we are not willing to trade against what is presently a bearish bias. Volatility down today but not dead, markets will continue the extreme volatility on any unexpected news. The big question is, do we go up, or down, from here. My crystal ball is broken today, so no idea here.
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