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Tuesday’s bond market has opened flat with this morning’s only economic
data revealing no surprises and the stock markets relatively calm during
early trading. The Dow is currently up 47 points while the Nasdaq has
gained 12 points. The bond market is currently up 2/32, which should keep
this morning’s mortgage rates very close to yesterday’s levels.
The Commerce Department announced late this morning that new orders at
U.S. factories for durable and non-durable goods rose 2.1% in May, nearly
matching forecasts of a 2.0% increase. This points towards a
strengthening manufacturing sector, but was only a slight variance in a
minor report. Therefore, it has had little influence on this morning’s
bond trading and mortgage rates.
Tomorrow has only one monthly report scheduled and it is considered to be
of low importance. That would be May’s Goods and Services Trade Balance
at 8:30 AM ET tomorrow. It is the week's least important data and
probably will not affect mortgage rates. It measures the size of the U.S.
trade deficit and is expected to show a $40.8 billion deficit. This data
usually does not directly affect mortgage rates, but it does influence
the value of the U.S. dollar versus other currencies. A stronger dollar
makes U.S. securities more attractive to international investors because
they are worth more when sold and converted to the investor's domestic
currency. However, unless we see a significant variance from forecasts, I
don't believe this data will lead to a change in mortgage rates tomorrow.
The U.S. financial and mortgage markets will be closed Thursday in
observance of the Independence Day holiday. They will also close early
tomorrow afternoon ahead of the holiday and will reopen Friday morning
for regular trading hours. We could see bond traders sell some holdings
before the 2:00 PM ET close to protect themselves over the holiday, which
raises the possibility of seeing an upward revision to mortgage rates
tomorrow afternoon.
Also worth noting is the fact that the markets and government offices will
be closed Thursday when the Labor Department usually posts their weekly
unemployment update. There appears to be quite a bit of confusion and
conflicting information regarding the actually release date of this
week’s update. I believe we will see it posted early tomorrow morning,
but some sources are calling for it to be released Friday morning.
Regardless of when it is posted, it is expected to show that 348,000 new
claims for unemployment benefits were filed last week. This would be a
slight increase from the previous week’s 346,000 initial claims. The
higher the number of claims, the better the news it is for the bond
market and mortgage rates because it would point towards a softening
employment sector.
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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