Wednesday’s bond market has opened up slightly with stocks showing minor
losses during early trading. The Dow is currently down 23 points, but still
above 15,000. The Nasdaq is nearly unchanged, down 1 point from yesterday’s
close. The bond market is currently up 2/32, but I don’t believe we will
see much of a change in this morning’s mortgage rates. Today’s rates will
likely be nearly unchanged from yesterday’s afternoon levels.
Today has no relevant economic data scheduled for release, but we do have
the first of two Treasury auctions that have the potential to affect
mortgage rates. The Treasury will sell 10-year Notes in today’s auction and
30-year Bonds tomorrow. If investor interest was strong in today’s sale, we
could see bond prices move higher and mortgage rates improve during
afternoon trading. However, a weak demand for the securities could lead to
pressure in bonds that cause an upward revision to rates. Results of the
sale will be posted at 1:00 PM ET, so any reaction will come after that.
Tomorrow’s only economic data is the weekly unemployment update from the
Labor Department at 8:30 AM ET. They are expected to announce that 336,000
new claims for unemployment benefits were filed last week. This would be an
increase from the previous week’s total, hinting that the employment sector
softened a little last week. This data usually doesn’t influence bond
trading enough to impact mortgage rates because it tracks only a single
week’s worth of new claims. However, with nothing else in terms of economic
data scheduled this week, tomorrow’s weekly update is technically also the
week’s most important data. Therefore, we may see a little more reaction in
the markets than we usually do. The higher the number of new claims, the
better the news it is for bonds and mortgage rates.
Also tomorrow is the 30-year Treasury Bond auction, although it will not be
newsworthy until afternoon trading. We will also still be watching the stock
markets for bond direction and changes to mortgage pricing. The Dow finally
closed above 15,000 yesterday, likely setting up a battle to make it a
level of support rather than resistance. If it continues to move higher, we
probably will not see a bond market rally of any significance in the
immediate future. But if it slips below and is unable to stay above the
15,000 threshold, stocks could be in for a pullback that would help buoy
bonds, leading to lower mortgage rates. In other words, we are at a crossroad
and the next couple days are very important for mortgage rate direction.
If I were considering financing/refinancing a home, I would.... Lock if my
closing was taking place within 7 days... Lock if my closing was taking
place between 8 and 20 days... Lock if my closing was taking place between
21 and 60 days... Float if my closing was taking place over 60 days from
now...
|
No comments:
Post a Comment