Monday Market Commentary: Mortgage Rates Rise Slightly

by Alex Stenback on July 9, 2007

                                                                       Graphic Courtesy MSNBC
Last Week
Mortgage rates managed to creep up (though still at 30 day lows) late last week despite the odd mid-week holiday and what were basically skeleton crews on the trading floors.  The culprit, of course, was a strong jobs report which played into the markets (and by extension the Fed’s) fear of wage based inflation. (Wage Based Inflation: Where rising wages spur consumption, pushing prices higher.)  Because bonds hate inflation, mortgage bond prices fall and rates rise.
This Week
Not a lot on the economic calendar for the bond market to digest this week – Friday’s retail sales report is circled in red on our calendar – so in the meantime, look for rates to move on technical factors, but as of this writing Monday AM, mortgage bonds seem to have shaken off last weeks negativity and prices are improving slightly.
This Week’s Economic Calendar [barrons]

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