Mortgage Rates - Little More Improvement Today

Mortgage rates once again focused more on domestic issues today as Greece had not yet voted to approve its bailout by the time US markets closed.  While the results of that vote could cause volatility tomorrow, the absence of those results had little impact today. 

Yellen was at the House Financial Services Committee today. Her statement was pretty clear, she is ready to being normalizing rates this year with the first rate hike. She took it from Representatives over the Fed’s easy money policy and the Fed’s transparency - congress wants its fingers in the pie. She also sounded worrisome about the EU/Greece mess but did not waiver on her rate increase timeline. She was a little more hawkish than her speech last week in Cleveland. The Fed has set two conditions for raising rates - further improvement in the U.S. labor market and signs that inflation is on a path to return to 2%.

Tomorrow weekly claims are expected to be down after increasing last week.  The July Philly Fed business index and the July NAHB housing market index are also due out.  Yellen will go back to the Senate Finance Committee tomorrow to complete her testimony.

In summary, there was an unexpected improvement in the bond and mortgage markets today, but with no significance other than some positions being balanced ahead of the Greek vote tonight. Does not change anything, the 10yr and MBS technicals remain bearish. Every slight improvement has failed and I do not see anything now that will change that. The Greek vote will happen in about soon and approve the creditor demands, thus kicking the can down the path once again.