Overseas Issues Affecting Mortgage Markets

Overseas issues are affecting the markets.  Last night the President authorized air drops of supplies to support fleeing people from the Islamic State, he also authorized controlled air strikes to assist the refugees, mostly Yazidis, a religious group in northern Iraq. The reaction overnight sent the 10yr note to 2.35%, the German bund to 1.02%. By this morning markets have settled down with the US stock indexes pointing to a better open after selling off 100 points overnight the futures markets, the rate markets coming off the lowest levels. No ground military personnel is likely according to the President last night in his announcement. Just out; the US has started air strikes on the Islamic State militants.

US and global markets are completely focused on what is happening (and what may happen) in Ukraine and the mid-east.  How long? Not an answer even our government can anticipate. Look for the mid-east turmoil to gather momentum now with Syria, Jordan, Lebanon, Iraq, Iran, and Israel beginning to heat up again. Economic outlooks and data will not carry as much importance as usual as long as all these situations continue to boil.

Good news for the mortgage markets. Fair Isaac announced it is changing how credit scores are calculated. It will stop including any record of a consumer failing to pay a bill if it has been paid or settled with a collection agency, and adding less weight to unpaid medical bills that are in collection.

Rate markets continue to decline (rate) - no matter the comments or news these days investors and traders are buying insurance in US treasuries and pulling mortgage rates lower with it. The US stock market is technically bearish, the bond market technically bullish. Trying to anticipate all of the fundamental issues globally and domestically is difficult; go with how markets are acting instead of focusing on the fundamentals and trying to understand all the details.

Fundamentals drive markets, but how they influence price action is best measured by technical factors because market action encompasses everything driving markets---some well-known, some not well-known yet it is all embedded in the price movements. 

Keep a strong look at the markets and continue to cautiously float if you do want to take a risk.  Remember, if you want to know the benefits of locking your rate today versus floating, simply give me a call at 314-744-7806 or visit me on my website at www.CallTheMoneyMan.com.  I have access to real time Wall St. data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.