As of this morning, treasury prices are slightly lower (treasury yields slightly higher, mortgage rates slightly higher) as markets are cautiously optimistic that economic data will continue to be positive. In terms of economic releases, the November Existing Home Sales figure increased by 4% (market was expecting 2.3% increase) after increasing 1.4% last month. Finally, the Treasury will auction $29 billion in 7 Year Treasury notes today.

However, as of 11:00 AM, the financial markets were dissapointed that banks are still not showing a huge appetitte to buy regional Sovereign European debt, even with the ECB (European Central Bank's) massive funding operation. This is leading to more market uncertainty in Europe, and, as a result, lower interest rates.

Treasury prices fell yesterday (rates rose) on stronger than expected domestic and international economic results. On our side of the globe, Nov. Housing starts increased 9.3% month-over-month to 685,000 units, and Nov. Building Permits increased 5.7% month-over-month to 681,000 units. Both readings are the highest since the spring of 2010.

Steven Casil, Lyons Mortgage Services Inc.