Wednesday’s bond market has opened up slightly following favorable inflation
data. The stock markets are showing losses during early trading with the
Dow down 47 points and the Nasdaq down 7 points. The bond market is
currently up 5/32, which should keep this morning’s mortgage rates close to
yesterday’s morning pricing. Preventing an improvement in today’s rates is
weakness in bonds late yesterday that caused many lenders to revise pricing
higher during afternoon trading.
The Labor Department said early this morning that July's Producer Price
Index (PPI) was unchanged from June and that the core data reading rose
0.1%. Both readings were below forecasts of 0.3% and 0.2% increases
respectively. This means that inflationary pressures at the producer level
of the economy were not as strong as many had thought, making the data good
news for the bond market and mortgage rates.
Tomorrow has three pieces of economic data that bond traders will be
watching. The first is the weekly unemployment update from the Labor
Department at 8:30 AM AT. They are expected to announce that 339,000 new
claims for unemployment benefits were filed last week. This would be a
small increase from the previous week’s 333,000 initial claims and hint
that the employment sector weakened slightly. The higher the number of new
claims filed, the better the news it is for the bond market and mortgage
rates because rising unemployment claims indicates the employment sector is
softening, not strengthening. It is worth noting though that since this
data tracks only a single week’s worth of new claims, it takes a wide variance
from forecasts for it to influence mortgage rates.
The second report of the day tomorrow will be July’s Consumer Price Index
(CPI), also at 8:30 AM. It is the sister report to today’s PPI but measures
inflationary pressures at the more important consumer level of the economy.
Rising inflation erodes the value of a bond’s future fixed interest
payments, causing investors to sell them at a discount and pushes yields
higher. Since mortgage rates tend to follow bond yields, this has a
negative impact on rates. Analysts are expecting to see a 0.2% increase in
the overall index and a 0.2% rise in the core data reading. Declines in the
readings, especially in the core data, should lead to lower mortgage rates
since it would mean inflation is still not a threat to the economy. On the
other hand, stronger than expected readings may lead to an increase in
mortgage pricing tomorrow.
July's Industrial Production report will be posted at 9:15 AM ET. This data
gives us a measurement of manufacturing sector strength by tracking output
at U.S. factories, mines and utilities. It is considered to be moderately
important to the markets and can influence mortgage rates slightly.
Expectations are for a 0.4% increase in production, indicating some
strength in the manufacturing sector. Good news for the bond market and
mortgage rates would be a decline in output, signaling sector weakness.
However, the CPI report will draw the most attention in the markets
tomorrow morning.
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...
|
Installment loans for bad credit direct lenders uk is considered to be an easiest way for the applicant having stained credit ratings for availing the funds .individual for availing the funds through this are not require to go through any process of credit verification.
ReplyDelete6 month cash loans online
installment short term loans
500 Payday Advance
Car Loans for People on Dss has been designed to help out the individual availing the immediate cash which will help them in fulfilling all their monetary requirements on the right time, Please visit
ReplyDeleteno credit check loans for people with on benefits
unsecured loans for people with ccjs
Same day loans for people on income support