Mortgage Rates Generally Unchanged

Mortgage rates were generally unchanged to begin the short work-week for financial markets, though that was not the case when I wrote my first report this morning. It took about 90 minutes this morning to digest the data that was released. The final two, both the Chicago PM index and May consumer confidence shook the confidence about the Fed and the economy.

Crude oil opened higher this morning pushing stock indexes slightly higher, but crude reversed and ended down about $0.50. Nothing significant, traders lightening up on long crude positions ahead of the OPEC meeting on Thursday. By the end of the session the DJIA after dropping 149 points ended lower but recovered over half of the intraday low.

The rate markets made a quick turn at about the time I pushed through my first report and the 10yr hitting the high of 1.89%. Supporting the bond market, the decline in oil prices but the dollar strength was more a factor along with the soft Chicago PM index and a decline in consumer confidence index, the lowest since last November. The constant debate over when the Fed will make its move continues and will not stop - ever as it seems, going on now for the last two years. The Fed has had more moves than OJ Simpson. Markets probably split 50/50 if it is based on the guests at CNBC and Bloomberg - enough to give one a migraine. Employment and better data between now and June 14th and 15th may decide when - and whether Britain leaves the EU.

The improvement in the 10yr yield today has not changed the slight bearish bias on the technical measurements. Need a close below 1.80% (1.84% now). Today’s volatility was more than a surprise.  If you are floating, you got lucky – but be careful as there is not much reward and too much downside at this time.

In summary, rates hung tough today, posting small gains as consumer confidence was lower than expected.  We are still bouncing around our prior range, which has narrowed over the past couple of weeks.  When that range breaks, rates typically move dramatically, especially after long "range bound" periods.  June right now is locked, and do not forget - Friday marks the release of May's NFP jobs report, so by end of day Thursday, floating borrowers assume higher risk, for better or worse.  Would I risks such – there is no way!