Rate Update December 1, 2010
Mortgage rates are worse today.
A trifecta of economic data is pushing yields higher this morning. Credit markets are stronger in Europe today on speculation that the EU Central Bank (Europe’s “Fed”) will amp up their own version of quantitative easing. This is putting pressure on the flight-to-quality trade which has helped rates here in the US.
Moving to Asia, economic data out of China earlier today showed that export orders were higher than expected last month. The markets are interpreting this to mean the consumers around the globe are starting to spend again which is good news for the economy but bad news for mortgage rates.
Lastly, as we know this Friday is the first Friday of the month which means the all-important jobs report will be released. As I pointed out in Monday’s ‘rate update’, since last month’s stronger-than-expected report fixed mortgage rates have increased by .50%. This morning, payroll company ADP, inc. released their own version of the monthly jobs report. Although this report is often unreliable in predicting the BLS report it did show robust private sector hiring which is a bad sign for mortgage rates.
Our move yesterday to go into a locking position proved timely. I’ll switch to neutral headed into the end of the week.
Current outlook: neutral
Posted: December 1st, 2010 under Rate Update.
Tags: dec 1 2010 MBS, dec 1 2010 mortgage rates, dec 1 2010 outlook for rates