Mortgage bond prices remain weaker since pricing as stocks turn positive again this afternoon. The DOW was down over 70 points and now is in positive territory. In addition there are new calls from China to replace the US dollar as the international reserve currency.
China is concerned that the US Government continues to print money, devaluing their current holdings. China is the largest holder of US debt. While the current talk is some saber rattling during these times of uncertainty, the threat is being taken seriously by the financial markets. This week the Treasury will auction $98B in 2, 5 and 7-year notes. The additional supply will likely keep prices in check.
When discussing rates with borrowers, make sure they are aware of the auctions and the potential upward pressure on rates that may occur. The auctions begin this afternoon. The 2 year auction was relatively well bid but we can't get any traction off of it with positive stocks.
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Thank you for your remarks. I will review your submission and post it accordingly. Dave.