Mortgage Rates Still Excellent, September 28, 2010

Mortgage Rates appear headed for slight improvement at initial pricing this morning.  The stock market is opening down while mortgage-backed securities are popular this morning.  Limited data will be available to guide markets today.

Mortgage Rate Trend Direction:     Down

Economic Reports/Rate Impact:    Consumer Sentiment, 10:00 AM ET, Moderate Rate Impact

Key News:                                          Comments from CEO of Leading Bond Investor

Summary

With only one official economic report today other factors may guide rates today.  Markets around the world are down today in reaction to US market losses yesterday.  Comments from influencial investors may impact the direction of rates as well.  I expect mortgage rates to improve slightly at initial pricing this morning.

Impact of economic reports

Consumer confidence fell this month rather sharply causing an immediate move down in stocks and up in bonds.  Other less influencial reports showed continuing drops in home prices across the country and a decline in manufacturing sector in the Richmond Fed region.  Taken together this data is positive for mortgage rates today.

Impact of international or political events

Comments from the COO of the world's leading bond investor demonstrate a major change in strategy for his firm.  He indicated that PIMCO would now focus on buying Asian government bonds rather than bonds from Western nations.  His quote is telling:  "Would you chose to lend to the most heavily indebted, slowest growing economies of the world, or the lesser indebted, faster growing economies of the world? I think that question answers itself."  Interesting...