Mortgage Rates Head Down to Start the Week, September 26, 2010

Mortgage rates seem to want to head lower to begin the week.  Most economic data will come toward the end of the week.  Today appears to be a "trader's day", trading the opposite of recent trends to generate more commissions.

Mortgage Rate trend Direction:     Down

Economic Reports/Rate Impact:   No economic reports released today

Key News:                                          Downgrade for Irish Bank, Merger Activity

Summary

Many times we see markets reverse course after a major move, particularly when no new economic data is available to provide guidance.  After last Friday's major move in the stock market, today appears like one of those days.  Stocks are lower in initial trading today and mortgage-backed securities (MBS) are trading higher.  Mortgage rates will likely start the day slightly better than they finished last week.

Impact of economic reports

No official economic reports will be released today.  Tomorrow we will see the consumer confidence report.

Impact of international or political events

Ratings firm Moody's downgraded Irish bank, Anglo Irish, signalling on-going economic trouble in Ireland.  Reports also surfaced that the European Central Bank has developed a plan to offer assistance to Ireland should conditions worsen.  A global banking and liquidity crisis could impact mortgage rates if it spread beyond isolated incedents such as this one.

Several mergers or acquisitions made news today and signal an economy getting stronger.  Unilever, a Dutch consumer products firm announced it was aquiring US firm Alberto-Culver.  Walmart announced it was purchasing a major distribution firm in Africa and Southwest Airlines announced that it would acquire Air Tran.  Stronger companies acquiring weaker ones is a sure sign of economic strength coming down the road.