Mortgage Rates Continue Volatility, June 11, 2010

Mortgage Rates Continue Volatility, June 11, 2010                      

Mortgage Rate Trend Direction          Neutral/Down

Economic Reports/Rate Impact          Retail Sales, 8:30 AM ET, Moderate Rate Impact

                                                            Consumer Sentiment, 9:30 AM ET, Low Impact

Key News                                            European Currency and Debt status

Summary

Yesterday was not a good day for mortgage rates, as a strong rally in stocks coupled with a sell-off in bonds resulted in lenders raising mortgage rates.  Today appears to be better as early trades in stocks are lower than yesterday’s close while mortgage-backed bonds are performing better.  The questions are: will these trends accelerate enough to result in rate improvement today and will they hold.  Initial rates from lenders are likely to be lower than yesterday’s final rates. As has been the trend lately, the news of the day will likely decide the ultimate rate direction.  Retail Sales data, the Consumer Sentiment survey and comments from European leaders regarding their debt and currency issues could move mortgage rates today.

Impact of economic data released today

Retail Sales figures came out this morning lower than was expected.  This moved stock market expectations for the day lower while bonds improved significantly (good for mortgage rates).  Consumer Sentiment survey results will be out mid-morning and are expected to show a decline in consumer confidence.  This negative news on the economy could further the improvement in rates.

Impact of international or political events

Debt and currency troubles are still in the spotlight in Europe.  Stocks surged in Asia on Friday while they are up across Europe as well.  The new Japanese prime minister made comments regarding his country’s debt situation that alarmed some analysts, who predict he is attempting to try to raise taxes.  Any late day news from Europe or Asia could move rates.