Daily Commentary by Larry Baer: Mortgage investors' nudged rates higher this morning on a trio of really good excuses including record Black Friday sales, a rumored 600 billion euro International Monetary Fund rescue plan for Italy and talk Germany is willing to issue a common European bond with its poorer neighbor.
The sketchy details surrounding the developing stories from Europe are suspect in my mind - but nonetheless have been considered enough of a step-in-the-right-direction by enough credit market participants to undermine some of the safe-haven allure of Treasury debt obligations and mortgage-backed securities.
News from the Commerce Department indicating the pace of October New Home Sales posted its best performance in five months was also took a little glimmer off of investors' willingness to push mortgage rates meaningfully lower. The 1.3% month-over-month gain for the headline number together with other details including the 8.9% year-over-year gain for new home sales created a flicker of hope suggesting the housing sector may be finally establishing a long awaited bottom.
From this point through the release of the November Nonfarm Payroll figures at 8:30 a.m. ET on Friday the ebb and flow of headlines related to the European debt crisis will be the "wild card" which most significantly influences the trend trajectory for mortgage interest rates.
Be patient -- be disciplined -- and consider using the numbers provided above as a blueprint for your risk management strategies this week.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
