Mortgage Rates Try to Hold Record Lows, June 8, 2010

Mortgage Rates Try to Hold Record Lows, June 8, 2010

Mortgage Rate Trend Direction      Neutral/Up

Economic Reports/Rate Impact    No Reports released today

Key News                                        European Currency and Debt status

Summary

Coming off historic lows as the market closed yesterday, mortgage rates are expected to begin the day flat or up slightly. Asian markets were mixed in Tuesday trading, as traders are awaiting news, later in the week, regarding the strength of the Chinese economy. European markets are up modestly today and the euro (the common currency of the European Union) rose slightly versus the US dollar. Early indications from our stock market are for a modest increase at the opening of trading today from the 2010 lows reached yesterday. 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 early today, though a strong rally in the stock market could push rates up. Remember mortgage rates tend to move down slowly, but they tend to move up quickly.

Impact of economic data released today

No economic reports of significance are due to be released today. However, positive comments made this morning by Ben Bernanke, Chairman of the Federal Reserve regarding the state of the US Economy provide a foundation for rising stock prices this morning. Another private report from the National Federation of Independent Businesses shows that small business owners are becoming more optimistic about their prospects.

Impact of international or political events

Debt and currency concerns remain the key economic issues in Europe. Chairman Bernanke addressed those concerns as well in his early morning remarks. Mr. Bernanke believes that the members of the European Union are committed to the survival of the euro currency, and that the members have more than enough money to support those countries with high debt obligations. Mr. Bernanke’s opinion will likely calm stock and bond market concerns—at least initially—this morning resulting in modestly higher stock and modestly lower bond prices.