Mortgage Rates Moved Slightly Lower
Mortgage rates moved just slightly lower today,
following a fairly abrupt spike over the first two days of the week. This the sort of movement that neither
confirms nor rejects the possibility that early July marked long-term
lows. Instead, it is much better than at
least the alternative, to be sure.
Specifically, if rates had continued higher today, they would have
crossed key levels that suggested more upward momentum.
All this action was coming in on the heels of the 10yr
Treasury note. So far I do not think it
anything significant other than as we have been noting, there is still demand
for US treasuries out there. One illustrative today after the very weak 10yr
auction yesterday (the weakest in seven years), today the 30yr bond auction met
with very strong demand. Even though it
was a small auction, the demand was evident.
The Fed released its Beige Book this afternoon to a
yawn, as markets have not given too much credence to the Fed’s comments as much
as it was in the past. Tomorrow markets will finally begin to get some domestic
data with June PPI and weekly jobless claims. Friday markets will have June
retail sales, CPI, industrial production and factory use, business inventories
and the U. of Michigan consumer sentiment index.
The improvement in the treasury markets today should
not be taken as a buying opportunity, but just a trading bounce. Technically the 10yr
held its first minor support at 1.53% yesterday but the major trend support is
1.60%. Sovereign debt markets in Germany, France and the U.K. also rebounded
somewhat today.
The Brits have a new Prime Minister; Theresa May. She
has a plate full with the UK vote which she did not favor, she wanted to stay.
Already she has made a number of key appointments to her cabinet.
In summary, bonds hung tough today, with 10yr yields
in 1.47% range, which is highly encouraging.
Rates are back in "wait and see" mode, but on the right side
of the yield fence. Until we get a
definitive move, whether up or down, hard to say where this goes. I am going to cautiously float most new
applications, but if treasuries break 1.53%, that stance will change in an instant.
Comments
Post a Comment