Mortgage Rates Start Off Better This Morning

Mortgage rates are trending very slightly better this morning as we are seeing a better start after soft prices last Friday.  There is no US economic data today except this afternoon with November consumer credit data, and little until Friday. Two Fed officials will talk today and that is always an interesting ordeal. The better start this morning on some increase in the dollar, weaker crude prices, and stock indexes prior to the open a little lower.

There are three items we must be aware of this week that have the greatest ability to impact mortgage rates. First is the Fed, as the spotlight will be on Janet Yellen, but the other Fed residents will also be talking and as I already mentioned above, you never know what will come from their discussions.

We have large amount of very important data out of China (world's number 2 economy) with Imports/Exports, PPI and CPI. Germany (world's number 4 economy and the driving force for the Eurozone) will have a very important 10yr bund auction, Industrial Production, Real GDP and Wholesale Trade. The Brexit will continue to gain a lot of attention as Prime Minister May makes comments on the timing and desired type of post-EU existence for Great Britain.

Here in the US, the biggest report of the week will be Friday's Retail Sales data. We already know from last week's Total Vehicle Sales data that Auto Sales will be strong, so we will focus on the Retail Sales Ex-Auto. We also get some inflationary data with PPI, more jobs data as well with the LMCI, JOLTS and Weekly Claims.

While mortgage rates have been relatively volatile last week we are starting to build a nice little channel for mortgage rates. I do not expect mortgage rates to move significantly higher or lower this week. Of course, any unforeseen event can change all of that. At 11:00AM, we have very little movement with both the 10yr at 2.38% and MBS in positive territory at +14BPS.