Mortgage Update

Treasuries and mortgages continue yesterday's rally due to the concerns of a possible Greek default.  As citizens riot in Athens against any possible austerity measures, the debt crisis is creating chaos in the European credit markets. The Euro aid package may need to be doubled, while Germany is reportedly looking to push any rescue package for Greece to September. Meanwhile, the Greek PM said he would retool his cabinet and look for a vote of confidence to come early next week. Domestic data has been mixed this morning.  Initial Jobless Claims fell by 16,000 to 414,000, an improvement over last week's 421,000 and exceeding market forecasts of a 6,000 drop.  On the other hand, the Philadelphia Fed index came in at -7.7 reflecting a contraction in manufacturing activity in the region; a very similar number to yesterday's Empire State Manufacturing report.  The number was the worst in 9 months, and much worse that the anticipated reading of +7.  Currently mortgages are slightly better than yesterday afternoon's improvement.