Mortgage Rates Swing Upward Today

Mortgage rates had the pendulum swing the other way as it was at the bottom of the tight range we have been talking about for the past four weeks.  After touching 1.50% yesterday, the 10yr climbed to 1.56% by mid-afternoon as it heads to the other side of the range.  All the gains seen yesterday was all but taken away today.

On the other hand, it was a big day in the equity markets as all three key indexes made new all-time highs today. According to CNBC the last time that happened was in December 1999.  The $15B 30yr bond auction did not meet the kind of demand the 10yr did yesterday, as one economist put it, it was just an average auction. Import and export prices released this morning still negative yr/yr, with the imports/exports data showing no inflation, but not a surprise.

Tomorrow finally some interesting economic data after not much this week. July PPI, July retail sales, and June business inventories will come out in the morning, followed by the August mid-month U. of Michigan consumer sentiment index.

 I rode the rate markets for three days, locked a few loans this afternoon as the 10yr once again found solid resistance at 1.50%. The selling today took the 10yr back to 1.57% almost it 1.60% high that has held selling for a month. Now we have to watch it again to see if it holds. Right now I am wondering if we will stay flat now?  I am a little concerned with the uptrend line, making higher lows on rallies. Bottom line, we are back to waiting on the range to be broken.  It could take weeks at the pace we're going, but would not likely take any longer. 

In summary, Bond markets returned yesterday's gains today.  Pricing is still well within recent ranges, as we are talking about fairly small changes here.  I do not think today represents the best, or worst, pricing we will see in the next two weeks.  Short term floating (for now) means minimal risk and minimal reward.  With that in mind, not sure it is worth floating most loans.