Mortgage Rates Respond to Markets, July 21, 2010

Mortgage Rate Trend Direction:      Up

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

Key News:                                            US Companies earnings, Federal Reserve Chairman's Testimony

Summary

Today is filled with corporate earnings news and important commentary from the Federal Reserve.  Apple's earnings report after the close yesterday has the stock market poised to continue its upward trend from yesterday afternoon.  Early stock activity is higher in the US, while European and Asia markets have also risen today.  With such moves in stocks, typically comes less demand for mortgage-backed securities and with it higher mortgage pricing.  Therefore, mortgage rates are expected to rise from yesterday's final levels when lenders release initial pricing this morning (9:45 AM ET--10:15 AM ET).

Impact of economic reports

With no economic reports today, the market will agian focus on US corporate earnings and guidance. Apple's stellar earnings figures from last night and excellent results from three banks this morning (Morgan Stanley, US Bancorp and Wells Fargo) are encouraging analysts and traders in early activity. 

Impact of international and political events

Federal Reserve Chairman Ben Bernanke will testify before the Senate banking Committee at 10:00 AM ET.  Traders will be listening intently to his opinions on the state of the US economy and the troubles with european debt.  The Chairman's testimony can easily move markets and thereby mortgage rates.