Mortgage Rates Showing Some Signs of Improvement

75 years ago – the day that has lived in infamy.

Mortgage rates are moving slightly lower so far today as we are seeing a slightly better start this morning following bond market improvements in the euro-zone ahead of tomorrow’s ECB meeting. The 10yr was down to a low of 2.36% earlier today and MBSs are trading at a positive 8BPS. 

The ECB meeting tomorrow is widely expected to say the Bank will extend its €80B monthly purchases of debt from March to Sept 2017. An extension to the program of less than six months or a severe tapering before September 2017 would be seen as quite hawkish. One thing the ECB is not, is hawkish.

Weekly MBA mortgage apps this morning were somewhat encouraging after the previous week of huge declines.  The November Gallup US job creation index increased in October. The index is based on the core assumption that random samples of thousands of employed Americans in all parts of the country and across industries can provide accurate and up-to-date assessments reports of their companies' hiring and firing decisions. Traders usually ignore this data but it does fall in line with other jobs data.

Trump has nominated Marine 4-Star General James “Mad Dog” Mattis to head the Defense department. Got his name for his toughness in Iraq, as he once told Iraqis to leave a city he was attacking, or he would kill every one of you that stay.

No other scheduled data today except Oct consumer credit at 2:00 this afternoon. Markets usually do not pay a lot of attention to it but I like to see the revolving credit in the report, showing how much consumers are using credit cards. It is October data, so not real current. In September consumers were increasing the use of credit suggesting increasing confidence of job stability.

Crude oil continues to pull back as the OPEC cuts meet economic reality. Down $0.60 this morning, down $1.06 yesterday and down $0.62 on Monday; cutting half of the improvements on the OPEC announcement last Wednesday.

I expect mortgage rates to once again see this tight range and hope to see a more of a continuance on the improvement side - enough to make a meaningful difference in mortgage rates or fees.  Nothing left to move mortgage rates today one way or the other except for an unexpected move in oil.