Mortgage Rates Mixed Today

Mortgage rates were mixed today even though all indicators would have had them better than yesterday.  All in all, it was kind of a different session today - both stocks and bond markets improved and crude oil price increased. Mix that with that at the last minute Treasury delayed today’s $28B 7yr note auction until tomorrow at 10:30 am saying “technical difficulties”.

Tomorrow two very key reports out - the second release of Q4 GDP, and the final U. of Michigan February consumer sentiment index.

The G-20 meeting begins tomorrow in Shanghai. Financial officials expected to urge countries to increase spending and rely on central banks to hold economies together. In that regard most central banks are already abut out of stimulus bullets. IMF, World Bank and others are increasingly worried that global recession is possible. IMF threatening it will have to lower its 2016 growth outlook - again.  There is also talk about some kind of coordinated currency exchange rate pact, in 1985 it was accomplished as the Plaza Accord (named after the NY hotel).

MBS prices better today, the 10yr yield down and the stock market rallied. Crude oil also was higher. Interest rates followed German rates lower and ignored the equity markets. A different kind of session. The bellwether 10yr low yield closed at 1.65% on 2/11, today will be the second lowest close in this current rally.

In summary, the current range in 10yr has allowed us to speculate with very little risk day to day. Currently we are at 1.70% and have been in this tight range for several weeks.  When we get closer to the bottom of this range, one might make a case to lock.  As we tip closer to the support level of 1.84 it becomes very risky, and potentially hazardous, as interest rates are quite unforgiving on the way up and very slow to be beneficial on the way down. I am a believer that rates will see new historic lows during this current trade, the slower it occurs the better, as the fear is we rush to the floor and take the elevator back up. Proceed with caution.