Commentary: Mortgage interest rates edged fractionally lower this morning due to renewed worries about a near-term sovereign debt default by Greece and investor positioning in front of the start of the Federal Reserve's latest stimulus plan.
Greece announced it will miss its deficit reduction target and therefore fail to meet the requirements for the next round of bailout financing from the European Central Bank. The news sent global equity markets tumbling and sparked a rush of new capital into dollar denominated assets like Treasury debt obligations and mortgage-backed securities. On this side of the pond, the Fed's "Operation Twist" gets under way later this morning with the purchase of $2.25 billion to $2.75 billion of longer-dated government debt securities - an exercise that is expected to prove supportive of the mortgage market.
The Institute of Supply Management released their September manufacturing index numbers earlier this morning. The headline number rose to a reading of 51.6% from 50.6% the prior month. This is only the second monthly increase in the past seven months but leaves the index at its highest level since June - a fact that was just strong enough to cause investors to be a little more conservative when they set this morning's mortgage rates than they might have otherwise been.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
