There are no economic reports to sway the markets today, but fears of a global recession have ticked up on the heels of poor earnings reports by Merck, Wachovia, and Boeing. This has added pressure to Stocks and provided another nice boost higher for Mortgage Bonds.
Oil is trading under $69 a barrel and at the lowest levels since last August. This is good news for inflation and Mortgage Bond pricing.
Mortgage Bonds have really rallied higher after hitting dead on support last Wednesday. In fact, prices have gained almost 300bp since last Wednesday’s price lows.
This is good news for mortgage rates. As long as there are no hiccups in the foreseeable future rates should move lower.