Don't expect a lot of rate movement today (from yesterday's afternoon's bump in rates).
Mortgages took one on the chin yesterday following a better than expected ISM manufacturing data report. All in all, the positive report didn't sit well with bond traders that seemed skiddish of any positive data ahead of the official announcement of more money being pumped into the system by the Fed this week. Ultimately, more money in the system will result in higher inflation - which is not friendly to fixed rate investments such as bonds and mortgages. We backed up about .375-.5 off the highs of yesterday to this morning's opening. Most lenders repriced yesterday afternoon, so this morning's opening should be stable to yesterday afternoon's pricing.
Stock futures have staged a steady climb overnight to take a nice lead over fair value. The ascent comes largely in response to renewed weakness in the dollar, which is currently down 0.5%.
World stocks mostly rose as investors awaited the outcome of the U.S. midterm elections and the Federal Reserve's decision on how much it will pump into the U.S. economy to shore up the recovery.
If opinion polls are correct, President Barack Obama will have to work with a Republican-dominated House of Representatives at the very least. Many think that's a recipe for policy inaction over the coming two years before the next presidential elections, meaning the Fed will have to play an even more crucial role in sustaining the U.S. economy.
Today, we have no economic data, so we expect a flat day in the markets as everyone awaits the election results. No Fed official will speak today, however their meeting will begin today and adjourn tomorrow at 2:15ET.
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Note: just my thoughts ... refer to my blog from last week (don't expect rates to go down any longer)
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