Mortgage Rates Sideways Today

Mortgage rates were lifeless today as financial markets drifted sideways.  Although rates CAN move during the last week of December when there's an imbalance between buyers and sellers in bond markets, that is usually the exception to the rule.  We tend to see days exactly like today with effectively zero change in lender rates sheets compared to the previous business day (in this case, last Friday).

Some minor improvement today but mostly noise, but the 10yr still holding below its next support at 2.50% the 4th day that it has held after the strong jump after the tax cut bill passed.

Crude oil spiked briefly above $60.00 today on news of a pipeline explosion in Libya causing the country to lose about 90,000 barrels a day of production. Libya is one of two OPEC members, along with Nigeria, that were exempt from a deal to cap production this year. Both countries have suffered oil supply outages related to internal conflicts. The longer-term significance now is in doubt - trade is thin so the run-up still has to be confirmed in the price over the next week. A few weeks back another pipeline outage that carries U.K. North Sea Forties crude to market occurred. The price impact had worn off in recent days as the pipeline operator has signaled the pipeline will soon start moving oil again.

Tomorrow two key reports with December consumer confidence index and the NAR will report November pending home prices.

Bitcoin still a headliner and will continue to be next year. The price swinging widely recently as money mongers look to find the next mega move. It’s a commodity with no substance like gold where you can hold it in your hand. CNBC ran a survey, not scientific but seems to follow other surveys recently. In coming issues, I might explore the frenzy.  One currency strategists, Boris Schlossberg, foreign exchange strategist at BK Asset Management, commented today, buying bitcoin here would be like trying to catch a falling knife. Better have a lot of cash to do it with margins in futures now at 45% and volatility recently extreme. Personally, I would never buy anything that I cannot understand and this is one - so far.

In summary, it is reassuring to see rates hold sideways after they spiked early last week.  That said, the sideways momentum is best viewed as symptom of the season.  We will all know a lot more about underlying momentum in rates by the 2nd week of January.  Between now and then, there is limited risk and limited reward when it comes to floating vs locking.