Mortgage Rates Sideways Thus Far Today

Mortgage rates are moving sideways today after seeing the positive bounce we had in the mortgage bonds yesterday.  This morning's economic data was very positive for the economy and negative for mortgage rates.  While on the other hand, we have the OPEC issue that is helping to keep a lid on mortgage rates.  Expect these two events to continue to inject volatility in the mortgage rate market.

Softer this morning in early trade. Q3 GDP was slightly better than forecasts.  The price index was a little better than expected. The second estimate is 3 tenths higher than the first, at a plus 3.2 percent annualized rate and which includes an upgrade for consumer spending and, in further good news, a downgrade in inventory growth. Personal consumption expenditures rose at a 2.8 percent pace in the quarter, up 7 tenths from the initial estimate and, outside the 4.3 percent surge in the second quarter, the best showing by the consumer since second quarter last year. Inventories added $7.6 billion in the quarter, down from an initial $12.6 billion in a revision that held down the quarter's GDP but which will ease concerns of unwanted overhang that could slow fourth-quarter production.

Sept Case/Shiller 20 city home price index was slightly lower than expected. Month/month was expected up, but showed very little gain.  There was no immediate reaction to the report.

The November consumer confidence from the Conference Board expected exploded to a very high reading.  Another Trump effect?   I continue to be amazed about the reaction to the Trump win. His platform is pro-growth but betting on it happening next year may be way too optimistic. Listening to the financial press last week was like being in a different world for me. All of them were talking about start of the new bull market known as the Trump bump!

OPEC meets tomorrow - traders still unsure how it will work out. A cut in production is on the table but given how the price is this morning not much confidence that any cut will happen or that it would hold for long. Crude this morning lower. Oil experts saying that if OPEC does not cut back price the price will decline to under $40.00 before year end. The price of oil is a critical element for inflation outlooks, as crude leads the way for other commodities. Higher oil prices will support other industrial commodities and increase the inflation outlook.

At 11:00AM, the 10yr is down to 1.31% and MBSs are up a positive 14BPS.  I am hesitant on saying this, but you might want to watch the market very closely to see if it might be best to float.