Mortgage Rates Follow the Markets, June 19, 2010

Mortgage Rate Trend Direction:     Up

Economic Reports/Rate Impact:    No economic reports of signifigance released today

Key News:                                           US Companies Earnings, European Debt Crisis

Summary

Following Friday's big sell-off in the stock market and  a volatile day in the mortgage-backed securities market, today looks to be a little more tame.  Traders will be seeking new reasons for movement in asset and debt prices this week. With little new data in the US outside of a few minor earnings reports, guidance may come from Europe where more signs of problems with the ability of many nations to repay their debt have emerged.  However, initial mortgage pricing will likely be higher as the stock market regains some of Friday's losses.

Impact of economic reports

No government economic data is scheduled to be released today.  Toymaker, Hasbro and airline Delta, reported earnings better than expected today.  The National Association of Homebuilder's will release its monthly assessment of the sentiment of homebuilders.  Expectations are for a drop in builder's outlook to a new record low. After the close of markets today, IBM, Texas Instruments and Zions Bank will report earnings and outlook for the rest of 2010.

Impact of international or political events

Moody's a bond ratings firm, downgraded the debt of Ireland today as it pointed to lower growth prospects.  Also, in Europe, the International Monetary Fund and the European Union have broken off talks regarding on-going loans to Hungary due to the failure of the country to impose spending reductions. At the end of the week the results of the "stress tests" on 91 European banks will be released.