Mortgage Rates Continue Climb, September 10, 2010

Mortgage Rate Trend Direction:     Up

Economic Reports/ Rate Impact:   No Economic Reports Released Today

Key News:                                           Bank Capital Concerns, China's Economy

Summary

As I forcasted last Friday, we have seen a slow, but steady climb in mortgage pricing over the past week.  Today, appears to be setting up for a continuation of that trend.  No official economic data will be released until next Tuesday, meaning that other news is likely to guide market movement in the interim.   

Impact of economic reports

With no data of the official variety being released today, traders will seek other sources to provide their impetus for trading today.  One economist who appears to like seeing his picture on TV and his words in print, is Nouriel Roubini, branded as "Dr. Doom" by the financial media for his seemingly always negative forecasts.  Based on comment attributed to him today, it is not likely that he will be re-branded as "Dr. Optimism" anytime soon.  Speaking late, yesterday, Roubini used even stronger words to describe the slowdown in the US economy. He said he believed that economic growth in the US will "come to a halt" and it would "feel like a recession".

Impact of international or political events

Concerns are mounting among some analysts that banks in Europe and the US may face a new liquidity crisis as capital retention regulations are stregthened and real estate lending losses continue.  Negotiations among banking regulators are expected to be completed this weekend in Basel, Switzerland.  The regulations when announced are likely to be an early mover of markets next week.  Already, in anticipation of increased capital requirements, large German bank, Deutsche Bank is planning to raise billions of euros to meet the requirements.  Many other banks will be following suit in the days and weeks ahead.

On the good news front, news from China is encouraging for economic growth globally.  China released figures today indicating a significant increase in imports.  This is a sign of growing domestic consumption in China and is good news for US and other exporters around the world.