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Wednesday’s bond market has opened in positive territory with stocks showing
significant losses during early trading. This week’s rollercoaster ride for
stocks is in another downward drop with the Dow down 171 points and the
Nasdaq down 66 points. The bond market is benefiting from the stock
selling, currently up 9/32. Unfortunately, this morning’s gains are being
offset by weakness in trading late yesterday that will keep mortgage rates
nearly unchanged from yesterday’s morning pricing.
There is nothing of relevance scheduled for release this morning, so look
for the stock markets to be the biggest influence on bond trading and
mortgage pricing the rest of the morning and early afternoon. If the major
stock indexes continue to move lower, we could see bond prices move higher
and mortgage rates improve. However, a quick rebound from current levels
could translate into an upward revision to mortgage pricing later today.
The Federal Reserve’s Beige Book report will be released at 2:00 PM ET this
afternoon. This report is named simply after the color of its cover but
details economic conditions throughout the U.S. by Fed region. Since the
Fed relies heavily on the contents of this report during their FOMC
meetings, its results can have a fairly big impact on the financial markets
and mortgage rates if it reveals any significant surprises. Generally
speaking, signs of strong economic growth or inflation rising would be
considered negative for bonds and mortgage rates. Slowing economic
conditions with little sign of inflationary pressures would be considered
favorable.
Tomorrow has two pieces of economic data that may impact mortgage rates,
but neither is considered to be highly important. The first is the weekly
unemployment update from the Labor Department early tomorrow morning. They
are expected to announce that 355,000 new claims for unemployment benefits
were filed last week. This would be an increase from the previous week’s
346,000 new claims, indicating the employment sector softened a little last
week. The larger the number of initial claims, the better the news it is
for the bond and mortgage markets. However, since this report tracks only a
single week’s worth of new claims, it usually takes a wide variance from
forecasts for it to actually cause mortgage rates to change.
The final report of the week will be posted late tomorrow morning when the
Conference Board releases their Leading Economic Indicators (LEI) for
March. This data attempts to measure economic activity over the next three
to six months. This is considered to be a moderately important report, so
we may see a slight movement in rates as a result of this data if it varies
from forecasts. It is expected to show no change from February’s reading,
meaning it is predicting little growth in economic activity over the next
several months. A decline would be considered good news for the bond market
and could lead to slightly lower mortgage rates.
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... Float 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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