What's going on and why does it matter?
Mortgage pricing is at its best level since November of last year. Risk aversion in the financial markets seems to be in vogue as investors are favoring the safety of bonds vs. stocks in light of disappointing economic reports overnight in China and Japan, the hurricanes hitting the US, and concerns about another missile test from North Korea this weekend.
The Fed is very supportive of the mortgage market today with a sizable purchase of up to $2.05 billion of 30-year conventional mortgage bonds. The economic calendar is light today, and there are two Fed policymakers who are scheduled to give speeches.
What should you do about it?
Watch for mortgage bonds to remain in positive territory above their 10-day moving average, which has been operating as a technical level of support. However, be prepared to lock your rate quickly if mortgage bonds fall back below that level.