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Tuesday’s bond market has opened in negative territory even though stocks
are showing early weakness. There is nothing of relevance being posted
this morning to drive trading, but that hasn’t prevented a soft opening.
The Dow is currently down 88 points while the Nasdaq has lost 18 points.
The bond market is currently down 12/32, which will likely push this
morning’s mortgage rates higher by approximately .250 of a discount
point.
Tomorrow has one piece of economic data that has the potential to affect
mortgage rates. It will come from the Conference Board, who is a New
York-based business research group and not a governmental agency. They
will post their Leading Economic Indicators (LEI) for September at 10:00
AM ET tomorrow. This report attempts to predict economic activity over
the next three to six months. It is expected to show a 0.6% rise,
indicating that the overall economy is likely to grow in the immediate
future. Good news for the bond and mortgage markets will be a much
smaller increase than forecasts. However, this data is not known to be
highly influential on rates, so it will likely take a large variance from
forecasts for it to affect mortgage pricing.
Thursday starts the big news for the week with the preliminary reading of
the 3rd Quarter Gross Domestic Product (GDP) to be followed by October’s
Employment report Friday morning. Both reports are considered key data
and can create a great deal of volatility in the financial and mortgage
markets. We could possibly see more movement in rates either of those
days than we have during the first three days combined.
As suspected and previously mentioned, it appears that the benchmark
10-year Treasury Note yield is having a difficult time falling below
2.60% (currently 2.64%). The two highly important economic reports
scheduled for later this week could easily change that, but it looks like
there is a decent level of resistance in the market, preventing a move
lower. Therefore, anything except much weaker than expected results from
Thursday’s and Friday’s data could mean higher bond yields and another
upward move in mortgage rates. Accordingly, please proceed cautiously if
still floating an interest rate and closing in the near future.
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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