Mortgage Rates



A very nice start to the week; the 10 yr note yield early this morning down to 1.93% -5 bp frm Friday’s close and breaking some technical barriers. Stock indexes weaker is driving the bond market as has been the case for many months; at 9:00 the DJIA index -50 after unable to break above 13K last week. All key equity markets in Europe also soft this morning. Crude and gold weaker following the stock market.

The Group of 20 nations met over the weekend and nixed calls from the euro area to boost international lending resources. A major reason for weakness in equity markets this morning. The G-20 told Europe to come up with more financial firepower before they will consider lending outside support. The world economy is “not out of the danger zone” amid fragile financial systems, high public and private debt and rising oil prices, International Monetary Fund Managing Director Christine Lagarde said. The decision by G-20 finance ministers to deny more assistance pending an increase in the euro-area backstop puts the monkey on Germany, the biggest contributor to bailouts, to overcome its resistance to doing more. A parliamentary vote on a second Greek aid package looming in Berlin today, and there is a EU summit on Thursday and Friday.

This week has a number of key economic releases; durable goods orders for Jan, the second look at Q1 GDP (expected unchanged frm the advance report last month at +2.8%), the Chicago and ISM manufacturing index, Jan personal income and spending including the Fed’s favorite inflation reading, the personal consumption expenditures included in the income and spending data, the Fed beige Book, and weekly claims are all headliners that can move sentiment quickly in this uncertain climate.

The DJIA opened -55, the 10 yr note yield at 1.92% -6 bp and MBS prices +9/32 (.28 bp) for 30 yr mortgages.

At 10:00, the only data today, Jan pending home sales from NAR, expected up 1.5%, as reported up 2.0%, the highest index since April 2010; Dec sales revised to -1.9% frm -3.5% originally reported. Yr/yr pending sales +8.0%. Pending home sales are contracts signed but not closed,. There wasn’t much reaction to the report.

Mortgage interest rates and US treasuries continue to trade in narrow ranges; the improvement this morning in the 10 yr treasury note has its yield now under its 40 day average and the relative strength slightly under 50 (47.5). We have resistance on the 10 yr at 1.90%.