Mortgage Rates Hold, July 29, 2010

Mortgage Rate Trend Direction:     Up

Economic Reports/ Impact:            Jobless Claims, 8:30 AM ET, Moderate Rate Impact

Key News:                                          US Companies Earnings, European Comapny Earnings

Summary

All eyes were on the Jobless Claims report this morning seeking an initial direction for trades. That report is in, and a series of positive earnings reports have been announced since yesterday's closing of the markets. This combination of data and news has stocks heading higher and bonds holding close to yesterday's levels.  Consequently, mortgage rates are likely to begin the day up from yesterday's ending position. 

Impact of economic reports

The Jobless Claims report showed a drop in first-time claims that was slightly larger than expected.  Markets have initially viewed this as positive news.  This reaction could be short lived as deeper analysis will reveal that technical factors in the report's methodology discount small changes in the numbers.  Additionally, the continuing claims number and the unemployment rate actually increased.

Earnings from US companies such as ExxonMobile and Visa and many others came in positive, though forecasts for the remainder of 2010 were cautious.

Impact of international or political events

Excellent earnings reports from European companies have caused stocks across the continent to rise along with values of the Euro currency.  Much like the situation in the US, positive earnings are coupled with weaker long-term growth prospects.  For now traders seemed focused on the short-term.