June 7, 2010: Mortgage Rates Steady to Start the Week

Mortgage Rate Trend Direction Neutral/Down

Economic Reports/Rate Impact No Reports released today

Key News    Decline in value of Euro Currency 

Summary 

Mortgage rates are expected to begin the week holding the level they reached last Friday. The trading day in Asia and Europe saw sharp declines initially but have stabilized. Early indications from our stock market are positive, but not significantly.  US bond trading began at 8:00 AM with only slight movements thus far.  Taken together this early activity seems to be pointing to a neutral direction for mortgage rates from Friday’s close.   

Impact of economic data released today 

No economic reports of significance are due to be release today. On Wednesday of this week, a report will be released that takes a look at potential signs of inflation, the Federal Reserve’s Beige Book.  This report examines economic activity in each of the Federal Reserve regions around the country.  Whenever we see reports that indicate that there is more inflation in our economy it is a bad sign for mortgage rates.   

Impact of international or political events 

In Europe, debt and currency concerns remain the biggest influencer of markets.  Last week comments made by an official in Hungary regarding his country’s ability to pay its debt caused markets to drop.  Over the weekend these comments were largely refuted by others in the Hungarian government and debt analysts.  The bigger concern this week in Europe appears to be the continued drop in the value of the Euro, the European Union’s common currency.  When the Euro loses value, it means buying products and services with Euros costs more.  It may also lead to inflation in the US, as imported products cost more, and increased demand for US products leads to higher prices as well.