Thursday, July 9, 2015 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 -
Mortgage rates moved lower at a healthy pace today, ultimately hitting the best levels in just over a month. It was though a strange day today - the NYSE closed down from 10:32 am until 2:10 pm. No exchange has exclusive rights to trade any stock or exchange-traded fund, except during the opening and closing of trading. The bond and mortgage markets were looking heavy most of the day until the FOMC minutes were released at 1:00, then a small rally. The minutes were anything but hawkish - worries over the EU and China were discussed and most believed that inflation was still not edging to its 2.0% target and there were major concerns that the economic recovery was still in doubt.
Greece is off the radar now until this weekend when another summit is scheduled when Greece has been instructed to come up with a plan that creditors can agree with.
China has finally gotten attention as the potential next shoe to drop. Chinese leaders fighting a hug battle to keep China's equity market decline from spreading. For the moment it looks like they are losing the battle. A rumor out that China is going to sell $300B of US treasuries to support its equity markets.
Treasury sold $21B of 10yr notes this afternoon, re-opening the note issued in May. The auction found decent bidding from indirect bidders. Tomorrow weekly claims and $13B 30yr auction. Claims expected down 5K to 276K.
I still decided to float today even though some people out there said to lock. As I noted, the work remains bullish but so far there really has not been much movement.
In summary, Greece and China continue to dominate headlines and all this talk has been benefiting rates. Even the release of the Fed Minutes showed the Feds are even worried about Greece. We are either in the beginning changes of a trend change away from higher rates or this could be an opportunity to lock in. Your risk tolerance should be the deciding factor.
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