Rate Update February 11, 2010
Mortgage rates are higher this morning.
Interest rates were actually pressured higher yesterday afternoon following weaker than expected demand for the US Treasury’s $25 billion auction of 10-year notes. I’ve been reporting on treasury auctions for weeks and this is the first time where auction results have substantially impacted mortgage rates. As the deficit continues to widen there may be more of this to come (click HERE to understand how government borrowing impacts mortgage rates). Oh yea, and today the treasury will auction another $16 billion in 30-year bonds.
The EU announced today that they would support Greece. However, a lack of detail on their plans is causing some skepticism in the markets. Should the EU announce a credible plan it would unwind the “flight-to-quality” trade and put upward pressure on mortgage rates.
Mortgage-backed bonds (MBS’s) are now trading right up against technical support. Should MBS prices break through this support we would likely see rates move another .125%-.25% higher. Hopefully this level holds and we see MBS prices reverse which would help rates retreat lower.
Current outlook: neutral
Posted: February 11th, 2010 under Rate Update.
Tags: feb 10 2010 direction of rates, feb 10 2010 interest rate advice, feb 10 2010 mortgage rate report, feb 10 2010 mortgage rates, feb 10 2010 outlook for rates, feb 20 2010 lock or float my rate