Mortgage Rates Trending Lower This Morning

Mortgage rates are trending slightly lower this morning.  On Friday, MBS sold off from their intra-highs after Trump signed an executive order that addressed part of Dodd-Frank. It was reported that part of that order pushed back the implementation of the fiduciary responsibility clause that was supposed to start in April, back 180 days for review. However, on Monday MBS rallied in early trading as it was discovered that the delay was in earlier versions of the memo and not in the final memo signed by Trump. This just illustrates the point that his administration's actions have more of an impact on long bonds than anything else. The bond market is still waiting to see what kind (if any) financial stimulus will be proposed and we still do not have any official proposal on tax reform. If we get any real movement on any of those two, it will have a significant impact on mortgage rates. 

Last week, we got a fairly “hawkish” policy statement but no real action. The bond market currently has a very low probability priced in to the Fed's March meeting for a rate hike but this week's slew of Fed officials could change that. 

President Mario Draghi of the ECB spoke this morning and confirmed that there will be no changes to their economic policy in the near future and attempted to talk up the market saying that currency values are in line with asset and equity fundamentals. 

The above three things are really the likely events that can cause major volatility in mortgage rates. However, I am looking for a relatively calm week in mortgage rates. This morning we have seen the MBSs rally to a positive 28BPS, and the 10yr holding steady at 2.43%.