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Friday’s bond market has opened flat with stocks mixed and no key economic
news to drive trading today. The stock markets are fairly calm also during
early trading with the Dow up 24 points and the Nasdaq down 1 point. The
bond market is currently unchanged from yesterday’s close, but we will
likely still see an improvement in this morning’s mortgage rates of
approximately .125 of a discount point due to strength late Thursday.
Yesterday’s 30-year Treasury Bond auction didn’t go nearly as well as
Wednesday’s 10-year Note sale did. A couple of the gauges we use to measure
investor demand showed much weaker results than Wednesday’s auction. That
would be bad news for the bond and mortgage markets, but the reaction in
afternoon trading and mortgage pricing was kept to a minimum yesterday.
We saw some gains in bonds late in the day yesterday, pushing the yield on
the benchmark 10-year Treasury Note down to 2.70%. This morning’s flat open
in bonds has kept the yield at that relatively important level. If it does
not break below 2.70% and stay below, there is a good possibility of seeing
it rise back above 2.72% or even higher. Since mortgage rates tend to
follow bond yields, this would translate into higher mortgage rates.
Accordingly, please proceed carefully if still floating an interest rate
and closing in the near future.
October's Industrial Production was posted at 9:15 AM ET this morning,
revealing a 0.1% decline in output and U.S. factories, mines and utilities
last month. This was a little weaker than the 0.1% increase that was
expected, so it indicates that the manufacturing sector may have been
softer than many had thought. That makes the data favorable for the bond
market and mortgage rates, although this is only a moderately important
piece of data.
Next week had several highly important economic releases scheduled that are
likely to be influential to mortgage rates. They include two key inflation
readings and a very important measurement of consumer spending in addition
to the minutes from the most recent FOMC meeting. There are a couple of
other reports due to be posted, but the most important ones are set for the
middle part of the week. There is nothing of relevance scheduled for
Monday, so we can expect weekend news to be the biggest factor on bond
trading and mortgage rate movement that day. Look for details on next
week’s activities in Sunday’s weekly preview.
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... Lock if my closing was taking place over 60 days from
now...
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