Rate outlook for the week starting February 27th 2012
Good start to the week for mortgage rates. When the markets opened this morning the yield on the 10 year U.S. Treasury bond was down and so were the US stock markets. Markets in Europe have also been soft all day. At the time I am writing this the 10 year yield is at 1.91% which is right above a key technical level of 1.90%. Remember the 10 year Treasury bond is one of the most relevant indicators of what is going on with mortgage rates other than the actual mortgage bonds.
The main reason we are seeing rates drop this morning is that over the weekend a group of 20 nations called the G-20 met. Discussions were centered on the debt crisis in Europe and they decided that Europe will need to come up with additional financial backstops before G-20 will consider lending more outside support. Also today there will be a vote in Berlin on a second Greek aid package.
On the economic calendar this week we have the following:
January pending home sales
Durable goods orders for Jan
The second look at Q1 GDP
The Chicago and ISM manufacturing index
Jan personal income and spending
The personal consumption expenditures
The Fed beige Book,
Weekly unemployment claims
EU summit on Thursday and Friday
The only data released today was January pending home sales from the National Association of Realtors. Pending home sales are defined as signed contracts but not yet closed. The report was expected up 1.5% and came in at up 2%, but no major reaction to the report in the markets. Mortgage rates will be sensitive to news out of Europe and US economic reports for the rest of the week.
Tags: Europe debt crisis, market preview, mortgage rates outlook