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Monday’s bond market has opened in positive territory in reaction to the
overseas news about Cyprus from this weekend. As expected, stocks are
reacting negatively to the same news, pushing the Dow down 41 points and
the Nasdaq down 17 points. Both indexes are well off earlier lows, but are
still in negative ground. The bond market is currently up 14/32, pushing
the yield on the benchmark 10-year Treasury Note back below 2.00% during
early trading. That should create an improvement in this morning’s mortgage
rates of approximately .250 of a discount point from Friday’s morning
pricing.
There is no economic data being released today that is of relevance to the
bond or mortgage markets. The rest of the week brings us the release of
four monthly reports for the bond market to digest, but none of them are
considered to be highly important. We also have some key Fed FOMC events
the middle part of the week.
The economic news begins early tomorrow morning when February's Housing
Starts will be posted. This report tracks construction starts of new
housing. It doesn't usually cause much movement in mortgage rates and is
considered one of the less important reports we see each month. It is expected
to show an increase in housing starts, indicating growth in the housing
sector. Good news for the bond market and mortgage rates would be a sizable
decline in new starts, but unless we see a large variance from forecasts
the data likely will not lead to a noticeable move in mortgage pricing.
Overall, I am considering Wednesday as the key day of the week with three
Fed events scheduled (FOMC adjournment, Fed economic predictions and
Chairman Bernanke’s press conference). The least important day will probably
be Friday, however, we could see movement in rates any day. It appears that
the recent stock rally could be losing steam and if that is true we may see
funds shift back into bonds in the near future that could lead to lower
mortgage rates.
If I were considering financing/refinancing a home, I would.... Lock if my
closing was taking place within 7 days... Float if my closing was taking
place between 8 and 20 days... Float if my closing was taking place between
21 and 60 days... Float if my closing was taking place over 60 days from
now...
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