No Change in Mortgage Rates

Another day with no movement in the rate sector. The 10yr tested the first resistance at 1.92% and held, just as last Friday it tested its resistance at 1.86%. A 6BPS yield range, it is not a big deal to move from one end to the other. Greece, China and the Fed in play with no domestic data so far this week keep markets in tight flat ranges in MBS’s and treasuries. What will it take to break out? A deal with Greece, a better outlook for Asian markets and/or stronger economic domestic data - those issues will send interest rates higher. No deal with Greece, China’s economy seen as slowing more and/or weaker than thought domestic data leading to less expectations for growth -those will send rates lower. In the meantime nothing has changed for weeks. I will keep reporting the news and my opinion, however there has not been much lasting news. Crude oil and the dollar also a factor and get a lot of talk and ink - but those also have seen only slight changes recently.

Tomorrow morning we will have March existing home sales, and on Thursday March new home sales. Friday will finish with March durable goods orders – as all three are major releases.

In summary, a couple of things to consider when trying to forecast which direction the break may occur.  Greece’s slippery slope is becoming slicker, as the threat of default is in the air or how the ECB will react.   China’s outlook muddy and likely will continue that way for months. The Fed not sure what to do. The German Bund yields appear to have bottomed - at least in the short term - and may head higher.  Equities also appear to be turning a corner.  In the case of a stock sell-off, it is possible that some of that money makes its way back into bond markets, which would help rates move lower.  If you are in the camp which believes bonds may improve and rates can decrease then float and hope it comes to fruition.  If you are happy with your rate and do not want to take on market risk lock in.