Mortgage Rates Still in the Narrow Range

Mortgage rates are trending sideways to the better this morning, this after a mild week when it comes to Jobs reporting. Mortgage rates continued to trade in very narrow channel with relatively low volatility.

With this being a short week (Easter Week), there are still some underlying factors that could still move rates this week.  MBS traders are trying to get a better sense of the timing and mix of the Fed reducing the amount of their MBS purchases each week. To that end, the big focus will be directed on Janet Yellen's speech later this afternoon at the University of Michigan.  St. Louis Fed President James Bullard spoke in Australia and said that the Fed should not be in a rush to raise rates but instead, end their balance sheet reinvestment. After these two, we will have Neel Kashkair tomorrow, along with the Fed’s Atlanta Fed Business Inflation Expectations on Wednesday, and the Fed's Balance Sheet on Thursday.

Across the seas, we have several key stories that needs attention.  France will have a round of voting to narrow the Presidential field. The more votes that Le Penn gets, the better it is for MBS as traders are concerned that her (and other right-wing contenders) would lead France to leave the EU (like the Brexit). Syria and the U.S. will continue gain attention as tensions mount among Russia, Iran, Syria and the U.S. Tensions with North Korea and trade negotiations with China will also get a lot of attention.

Our most significant releases will not hit until Friday, and the bond market is closed that day. Retail Sales, PPI and CPI will get the most attention from long bond traders. Also, we have Treasury auctions this week, with the 30yr looking to be the one everyone is waiting for on Thursday.

Look for relatively low volatility this week from mortgage rates. The biggest economic news of the week will be released Friday when the bond market is closed. The Geopolitical situation is a bit of a wildcard and can have a significant effect on mortgage rates at any time.