Mortgage Rates Reach New Lows, More Records Ahead?, June 10, 2010

Mortgage Rates Reach New Lows, More Records Ahead?, June 10, 2010

Mortgage Rate Trend Direction      Up

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

                                                              Trade Deficit, 8:30 AM ET, Low Rate Impact

Key News                                           European Central Bank/Bank of London Meetings

Summary

After another surprising end-of-day drop in rates, we are once again are at all-time lows. What have we learned over the past several weeks of ups and downs in the market? For sure we have learned that the initial pricing of mortgage rates (most lenders price between 9:30 AM ET and 10:00 AM ET) is not indicative of where they will finish the day. Volatility has been the rule, with rates rising and falling based on the developing news of each day. Today it appears we are going to start with an increase from yesterday’s closing rates. Stocks are up significantly in early trading and bond prices are down sharply. This is the usual set up for lenders to increase rates at their initial pricing. Jobless Claims data and trade deficit numbers have the ability to sway the markets today.

Impact of economic data released today

Both Jobless Claims and Trade Deficit numbers came in about as expected today, meaning that the market will likely look elsewhere for news to influence its direction.While the numbers show the number of people filing first-time claims for Unemployment Insurance continuing to be very high and that our economy is importing far more products from other countries than we are exporting, the results were not surprising. Surprises move markets.

 Impact of international or political events

The European Central Bank and the Bank of England are meeting today to determine their key interest rates. Expectations are for these central banks to keep rates unchanged. Comments from leaders at these central banks regarding the on-going debt and currency crisis will have the ability to move rates. Stocks were higher throughout Europe in trading today. Asian markets were sharply higher as good economic reports from Japan and China spurred the markets.