Mortgage Rates



This Week; On Monday Europe will hold another summit meeting in Brussels in another attempt to get a plan worked out and approved to provide Greece with funds necessary to avoid defaulting on its debt on Mach 20th. According to people in the region, if the summit fails once again, the next meeting is on March 1st. Based on history with Greece it is unlikely they will get a deal this time around; this is going right to the wire similar to how the US dealt with the budget debt extension. The key data this week are existing and new home sales. Treasury will conduct the monthly auctions of 2 yrs, 5 yrs and 7 yr notes; starting Tuesday with the 2 for a total of $99B, the same amount as in the past five months.

Increasing economic bullishness is driving stock markets higher, if a Greek deal is accomplished this week equity markets will take it as a positive and add additional selling in the bond and mortgage markets. Technically the 10 yr treasury is slightly bearish now, however on selling it has managed to hold the first support at 2.05%, if that fails the next stop will likely be 2.15%. MBS markets follow but with not as much increases in mortgage rates. As long as equity markets continue to improve the bond and mortgage markets won’t have much to hang onto, but we still don’t think rates will increase much.