Mortgage Rates Holding Ground

Mortgage rates are doing a great job of holding their ground after two days of solid improvement.  Four days now that the 10yr note has improved, not a lot but good to see. There is nothing that has changed though, as the work remains bearish - the 10yr has found solid resistance when it drops to 2.30% (2.35% now). MBS prices over the last three sessions up 60 bps points, also no technical change from the bearish pattern.

The Greek austerity vote passed last night opening the door for the ECB to provide more money to the country that has no way to repay now. After all of the news and market volatility over the last few months, the US markets seem to be just yawning with little major reactions.

Data tomorrow has interest with the June CPI following June wholesale prices that reported yesterday with higher readings than estimates. June housing starts and permits also will be release.  Less meaningful, but still attracts some attention is the mid-month U. of Michigan consumer sentiment report.

Greece is still to be monitored closely but presently there is not any serious interests after Greece voted for the extremely austere cuts in spending. It is not over, the problems have been mostly pushed down the road as they have been for the last five years. The EU members betting the country that has no money and no means to earn it will give it more money to pay the debt of monies already given. Like people that use on credit card to pay another as long as new cards can be had….Ponzi.

Yellen is still in her Q&A with the Senate Banking Committee. There has been no market reactions to any of her answers or her prepared text which as was the same with yesterday’s opening remarks.

In summary, our recent rally continued today, as investors pondered the chances of Greece actually fulfilling the terms of their austerity cuts. We are still chasing early July's levels, but at least heading in the right direction. For now, "the range is the range", and we are nearing the low end of it. I know that I have suggested locking with all this volatility, but I cannot fault who cautiously float hoping for further gains – so far the risk has not bit those yet.