Commentary: It is a very slow day in the mortgage market.
Traders are continuing to watch the swirl of activity, political as well as financial, surrounding the 11th hour efforts by euro zone countries to prevent a sovereign Greek debt default. As I write, the chances are highest that a default will occur. If so, an outright Greek sovereign debt default will likely create a flood of capital fleeing the expanding euro-land debt crisis to flow into the relative safe-harbor of dollar denominated assets like Treasury obligations and mortgage-backed securities. That is a condition, should it develop, sure to be supportive of steady to perhaps fractionally lower mortgage interest rates. I'll keep you posted as this story unfolds.
Trading activity in the stock markets will also exert influence on the direction of mortgage interest rates not only for the balance of the day - but during the majority of the coming week as well. Higher stock prices will tend to nudge mortgage rates higher while lower stock prices will tend to support steady to perhaps fractionally lower rates. For what is worth - my models are suggesting stock prices will likely move grudgingly higher next week.
Speaking of next week, not much is scheduled in terms of economic news -- with the exception of Tuesday's Existing Home Sales report and Thursday's New Home sales figures. Neither of these two measures of activity in the residential housing market will likely exert any noticeable influence on the direction of mortgage rates. The Federal Open Market Committee will hold two-days of monetary policy deliberations on Tuesday and Wednesday. The probabilities are extremely high nothing new will be forthcoming from Fed Chairman Bernanke and friends this time around. All-in-all a pretty boring week in terms of scheduled news and events.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
