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Tuesday’s bond market has opened up slightly with no relevant economic
reports or other events to drive trading today. The stock markets are up
slightly with the Dow up 19 points and the Nasdaq up 1 point. The bond
market is currently up 3/32, but due to weakness late yesterday we should
see an increase of approximately .125 - .250 of a discount point in this morning’s
mortgage rates.
There again is nothing of relevance to mortgage rates scheduled for release
today. Tomorrow morning also has nothing to be concern with, but we will
get the minutes from the last FOMC meeting tomorrow afternoon. Traders will
be looking at them closely as they give us insight to the Fed's current
thought process, individual Fed member opinions and potential future moves.
Any surprises in the 2:00 PM ET release, particularly about inflation or
the likelihood of an adjustment to their current bond buying program, could
cause afternoon volatility in the markets Wednesday and possible changes in
mortgage pricing.
Tomorrow also has the first of this week’s two Treasury auctions that have
the potential to affect bond trading and mortgage rates. The 10-year
Treasury Note sale is set for tomorrow while 30-year Bonds will auction
Thursday. We could see some weakness in bonds ahead of the sales as
participating firms sell current holdings to prepare for them. This
weakness is usually only temporary if the sales are met with a decent
demand. The results of the auctions will be posted at 1:00 PM ET each day.
If the demand from investors was strong, the bond market could rally during
afternoon trading, leading to lower mortgage rates. If the sales were met
with a poor demand, the afternoon weakness may cause upward revisions to
mortgage pricing.
With nothing on the economic front tomorrow morning, look for stock
movement to contribute to bond weakness or strength. Stocks may be driven
by earnings news released after the market closes today and before open
tomorrow. Strong earnings news usually translates into stock buying and
bond weakness. If the key earnings reports disappoint, stocks could move
lower while bonds strengthen and mortgage rates improve.
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...
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