Mortgage Rates Made a Positive Move Today

Mortgage rates made an anti-climactic move lower today after the big jobs report proved slightly disappointing to markets.  Even though the report did not miss by much, the revisions were larger than anticipated and the average hourly report did not move in a positive direction.  Of course spinmiesters were out dismissing the report as a one-off report.  The MBS markets as we commented this morning reacted to the report then sat still the rest of the session with the weekend ahead and markets closed tomorrow.

Should I stay or should I go now? If I stay it will be trouble, if I go it will be double. This is the current Greek anthem. This Sunday there will be the vote - too many opinions and too many “experts”. No idea here.  

There was another soft report this morning as May factory orders were down once again, down twice as much as expected.  Push it under the rug? Not so much, factory orders have been weak all year but do not get a wink from the bulls that are ignoring all soft data these days. Factory orders and the housing sector are not improving as much as most want to believe. These two sectors are where incomes and job growth have always driven economic growth - neither is holding up this recession rebound.

The broken record - I remain bearish for the near term bond and mortgage markets. 2.30% has to crack before we all can see a little sunshine.

In summary, I continue to stay out of any risk in the bond and mortgage markets. There is no consensus idea now about what will happen with the Greek referendum on Sunday and when the results will be revealed. Many are trying to handicap the Greek debt issues - does Germany want them in or out? Are markets prepared for an exit? Will a Greek exit spill over to Spain, Portugal and eventually end the euro experiment that in our view was a bad idea to begin with in 1998. One cannot mix cultures and countries all with independent histories and focus when the chips are down. It worked as long as there was no financial crisis, then 2008 hit and the true test began.

Sorry for the tardiness of this report, but I became a very proud father today when my son graduated from the Navy Boot Camp today.  Have a Safe 4^th of July and be ready to go next week.  Not much data, but it will be all about… well I am not going to say it – you all know.