Mortgage Rates Get Tanned, September 8, 2010

Mortgage Rate Trend Direction:     Down

Economic Reports/Rate Impact:    Federal Reserve Beige Book, 2:00 PM ET

Key News:                                           Portuguese Bond Auction

Summary

Mortgage rates fell yesterday back to near historic levels.  The question is can new lows be set?  Today market guidance will come primarily from the results of the Federal Reserve's Beige Book this afternoon.  In the meantime, other news will provide the guidance. Given the lack of information, I expect mortgage rates to begin the day slightly down relative to their closing position from yesterday in a carry-over of yesterday's trend. 

Impact of economic reports

The Federal Reserve's Beige Book is a measure of economic activity in each of the 12 regions of the US central bank.  In a week with very little economic data, this report takes on extra signifigance.  Because it is a comprehensive look at all regions and all economic sectors of the US economy, the clear trends in the Beige Book could move markets this afternoon.

Impact of international and political events

How can the auction of just over a billion euros of Portuguese debt move international markets?  Well today that is exactly what is happening.  Concerns have bubbled up again that government debt growth has outpaced the ability of certain European nations to finance their debt.  Today, Portugal was able to issue debt at reasonable prices and this has been viewed favorably by anlaysts and traders worldwide.  Still to come this week are debt issues from Ireland and Spain.