Mortgage Rates Continued Higher Today

Mortgage rates continued higher today as the recent volatility in global markets subsided.   MBS prices ran into some selling today following the 10yr note yield that is up 4 bps from yesterday.  Technicals still bullish but China is twisting markets like a tornado. Devaluing, then intervening to support the yuan ant then de-valuing again. US equity markets started weaker on the open this morning then through the day recovered but not much change from yesterday, and yesterday the key indexes were essentially unchanged. The bond and stock markets were rocked on Tuesday when China surprised by its currency de-valuing, since then there has been little movement in stocks and the 10yr note and MBS prices back to where they ended Tuesday, losing what was gained.

July retail this morning were better than expected on the upward revisions in the June sales. The juice was in the positive revisions in June.  The combination of easing fears over China and the retail sales report today kept the S&P index in the tightest trading range since 1927 according to Bloomberg news.

Tomorrow more important data with July PPI, and July industrial production. The mid-month U. of Michigan consumer sentiment index will also come out later.

I called for people to lock unless they were risk takers.  A lot of uncertainty now with China and now the clock is ticking closer to Sept 17th FOMC policy statement and Yellen’s press conference (traders looking to December but the economists see September – I still see 2016). Overall not much change in stocks and interest rates in the last couple of sessions. Frozen now with China and global economic outlooks.

In summary, China's monetary woes and currency devaluation seem to have eased (for the moment, anyway), and rates edged upward today. We are still near the lowest rates since early July, which is good news, but the trend lower is far from guaranteed. We have logged some great gains over the past 3 weeks, and there is no shame in guaranteeing your pricing by locking now, rather than waiting while hoping for further improvements.