Mortgage Rates Unchanged

Mortgage rates are generally unchanged this morning.  Yesterday we saw a nice rebound after a horrific start as the 10yr hit the infamous number of 2.45% which seems to be a ceiling now, before it headed down.  As I mentioned yesterday, we have now seen this happen three times and it has held.

This morning report on the Q3 productivity came in slightly below expectations, but the Unit Labor Costs in the report was very positive, which is a number we need to watch carefully as an inflation threat could come about if this continues to increase.

October US trade deficit was at $-42.6B in line with estimates and higher than in September.  Exports declined and Imports increased. The increasing strength in the dollar will likely keep the deficit increasing or at best at these levels.

CoreLogic reported its home price index up 1.1% for single family sales in October from September, which brings the Yr/Yr up 6.7%. Yr/yr forecast for single family home prices for the next twelve months is projected at 4.6% as the increases we have seen lately will slow down.

October factory orders and Durable Goods came in as anticipated. Crude oil had a huge move higher last week on the OPEC decision to cut production by 1.2 mil/day.  Last week we saw an increase of $5.50, and now so far this week, we are seeing a decline as much as $1.70 at 11:00AM.  The 10yr is even and the MBSs are trading in a narrow range basically unchanged with all the news this morning.

On Thursday, the ECB meets; the belief is it will continue its QEs to push the string for increased growth and extend the purchases past March 2017 when it was supposed to end. The Italian vote last Sunday should be rattling the ECB and EU, another country that is turning more to populist views as did Britain.

The stock market by every technical reading is over-bought and should retreat but still the Trump rally continues although this morning slightly lower to start. I am still cautiously floating and locking within the next 30 days of closings.