Thursday’s bond market has opened down slightly following stronger than
expected economic news. The stock markets are fairly calm with the Dow up 5
points and the Nasdaq practically unchanged from yesterday’s close. The
bond market is currently down only 1/32, but with some softness late
yesterday it should be enough to push this morning’s mortgage rates higher
by approximately .125 of a discount point.
The Labor Department reported early this morning that 323,000 new claims
for unemployment benefits were filed last week. This was a decline from the
previous week’s revised total of 327,000 and well below forecasts of
336,000 initial claims. That indicates strength in the employment sector
last week, making the data negative for the bond market and mortgage rates.
We also have today’s 30-year Bond auction to watch for this afternoon.
Yesterday’s 10-year Note sale was relatively uneventful. The indicators
that we use to gauge investor demand showed an average level of interest at
best. That wasn’t exactly a surprise, but it also doesn’t give us much to
be optimistic about in today’s auction. If there was a high level of
interest in today’s sale, we could see bond prices rise during afternoon
trading with a slight possibility of an improvement in mortgage pricing to
follow. However, a lackluster sale could erase some or all of this
morning’s improvements in bond prices and mortgage rates. Results of the
auction will be posted at 1:00 PM ET, so any reaction will come during
early afternoon hours.
Tomorrow has no relevant economic data set for release, although we do have
a speaking engagement by Fed Chairman Bernanke at 9:30 AM ET. He will be
speaking at Fed banking conference in Chicago and as usual, the markets
will be watching closely. This isn’t a major event that would normally draw
a significant amount of attention, but it is his first speech since last
Friday’s Employment report. Traders will be watching for him to reference
the data and his thoughts about it. Accordingly, any surprises will
influence the markets and mortgage rates, especially since there was so
little on this week’s calendar.
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...
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