Mortgage Rates See Positive - but Little Movement

Very little movement today in the bond and mortgage markets which is unusual these days. There has been no data or any market-moving news. Stocks a little lower after coming within 0.37 of 20K (19,999.63). Senate hearings on confirmations to the Trump cabinet begin today with the most contentious post, Sec of State designate Rex Tillerson the current front runner for contention, even among some Republicans. Some believe he is too close to Putin in the past as head of Exxon. Other posts also will likely get some attention but most will be confirmed.

Late this afternoon November consumer credit was reported by the Fed, and the numbers were higher than anticipated, which indicate that consumers are increasingly running up their credit-card debt. Non-revolving credit, up $13.5 billion, is also positive, reflecting demand for vehicle financing and student loans (which are tracked in this report).

Tomorrow not much data either and no Fed speakers.  We do have a Treasury auction tomorrow as well.

As Trump’s inauguration approaches, a week from this Friday - many of those over the top expectations he has advocated in his campaign and recent Tweets are going to become more questionable. Until the last week the equity markets did not care, it was onward and upward for stocks and interest rates higher - although interest rates do remain very low and with less selling recently. Trump intends to make his own rules, starting with the repudiation of the Trans-Pacific Partnership, renegotiation of the North American Free Trade Agreement with Mexico and Canada, and the imposition of hefty duties on Chinese imports. Then fiscal sending, tax cuts and re-dos of a lot of regulations. His administration will be very different from the globalization that marks the last 30 years. “Those looking for a grand design will be disappointed.

The momentum oscillators remain fractionally bullish but interest rates have declined since the 10yr hit 2.60 on 12/15/16. Recent trade in the last few days slowed down the rate declines. Volatility is subject to big jolts, not much today but last Thursday and Friday a reminder investors unsure and react to any news in rapid fashion.

In summary, looks like the 10yr treasury has found a new trading range from 2.42 on the high side to 2.32 at the lows.  Not sure if there is much to be gained by floating, but I also do not see any need to hurry and lock.  I would advise to lock any loan that is funding within 15 days.   That way, you can lock on a shorter-term lock and gain better pricing.  I would float everything else.