Mortgage Rates Sideways - Waiting for FOMC Announcement

Mortgage rates are moving sideways so far today as the bond and mortgage markets are finding little support after the selling yesterday.  So far, this morning at 11:00AM, we are seeing the 10yr a tad higher from the open at 2.33% and MBSs pricing flat after losing 33BPS yesterday.  The stock market is also showing some signs of life as it continues to go up.  I doubt we will see any movement until after the 1:00PM FOMC announcement.

Weekly Mortgage Applications were flat with a small change of 0.4%. Purchase Applications dropped -2.0% and Refinance Applications increased by 3.0%. June New Home Sales are expected to hit 615K on an annualized basis which is an improvement but not by enough to relieve the massive inventory short falls in the real estate market today. Later, we will have the Treasury 5yr note auction, which may not get too much play with the FOMC coming out shortly thereafter.

Crude oil is continuing to increase, as we saw yesterday the largest daily increase this year, up $1.57. This morning up another $0.45. Crude has increased about $3.00/barrel in the last three days, up 6.0%. The increase is another support for the stock indexes.

Swing and a miss. The Health Care vote came up short (43-57) last night, now starts the fun as multiple versions of a bill are at least going to be discussed by the Republicans over the next couple of days.

With the Fed policy statement due out today at 1:00PM, we could see increased volatility. Oil and the stock market continue to move higher which is putting additional pressure on the MBS market (higher rates) and increased volatility.

Stay focus if you are floating.