Commentary: Different day - same story.
The trend trajectory of mortgage interest rates over the balance of the week will probably be most influenced by a combination of auction results from Uncle Sam's $64 billion sale of 5- and 7-year notes together with the results of the Greek Parliament's vote on a five-year austerity plan.
The relative short-term of the securities offered at the upcoming Treasury auctions combined with the uncertainty surrounding the Greek debt crisis will likely be enough to induce both domestic and foreign investors to bid aggressively. If so, look for little, if any noticeable influence on the trend trajectory of mortgage interest rates as a result of the remaining two note sales.
Most analysts expect the Greek Parliament to hold two critical votes this week - one tomorrow, Wednesday, June 29th on the austerity plan itself to be followed by a second vote on Thursday, June 30th to implement the law.
If the austerity program becomes law -- look for the global financial market place to breathe a sign of relief - with riskier assets rising in value as safe-haven capital flows back to the pursuit of earning the biggest bang for the buck/euro.
Passage of the austerity plan is not certain. Should the Greek Parliament fail to ratify the measure, look for stock prices to plummet while Treasury prices soar as the global market place braces for another major financial meltdown.
It is a very close call. My expectation is that the Greek government will ultimately pass the austerity measure -- and will receive the first round of debt relief - only to default later as civil resistance to the plan proves too strong to overcome. If I'm right, mortgage interest rates will likely creep fractionally higher into mid-July.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
