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Friday’s bond market has opened in negative territory as Wednesday’s
selling extends into today’s trading. The stock markets are in positive
ground with the Dow up 51 points and the Nasdaq up 14 points. The bond
market is currently down 7/32, which with Wednesday’s afternoon weakness
should equate to an increase in this morning’s mortgage rates of
approximately .250 of a discount point if comparing to Wednesday’s morning
pricing.
Contributing to the weakness late Wednesday was a pretty soft 7-year
Treasury Note auction. After most of the day’s economic data gave us
unfavorable results, news broke about the lackluster interest in the sale
just as many traders were wrapping up their day ahead of the holiday. That
led to further weakness and many lenders revising their pricing higher by
the end of the day.
That selling, along with today’s early weakness, has pushed the yield on
the benchmark 10-year Treasury Note back up to 2.75%. It is worth noting
again that 2.70% appears to be a floor of support. It again dropped below
2.70% briefly this week, only to move back up to its current level. The
fact that 2.70% is a pretty strong resistance level leads me to believe we
are much more likely to see it move up closer towards 2.90% in the
immediate future than below 2.70%. And since mortgage rates tend to follow
bond yields, this would be bad news for mortgage shoppers.
The financial and mortgage markets were closed yesterday for the Thanksgiving
Day holiday. Today is also somewhat of a holiday with the many traders
still home, meaning we are seeing very light or thin trading this morning.
The stock markets are expected to close at 1:00 PM ET today while the bond
market is set to close at 2:00 PM ET. With thin trading and an early
closing, I am not expecting too much to happen the rest of the day in the
mortgage market.
Next week brings us plenty of economic data with the preliminary schedule
showing 10 reports that we traditionally follow. Not all of those reports
are worth stressing about, but two of them are considered to be extremely
important to the financial and mortgage markets. One of them comes late
Monday morning when the Institute for Supply Management (ISM) posts their
manufacturing index for November that tracks business condition sentiment
in the sector. Look for details on all of the week’s activities in Sunday
evening’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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