Wednesday’s bond market has opened in positive territory as the government
shutdown extends to a second day. The stock markets are helping to boost
bonds with sizable losses in the major indexes. The Dow is currently down
128 points while the Nasdaq has lost 28 points. The bond market is
currently up 14/32, which should improve this morning’s mortgage rates by
approximately .125 - .250 of a discount point over yesterday’s morning
pricing. Limiting this morning’s improvement in rates was weakness in
trading late yesterday that caused some lenders to revise pricing higher
intra-day while others opted to wait until this morning’s opening to
reflect those losses.
No government economic data was posted this morning due to the shutdown.
We did get a bit of employment-related data from the private sector this
morning. Payroll processor ADP announced this morning that their monthly
report that tracks payroll changes from their business clients showed an
increase of 166,000 jobs. This was a little softer than analysts were
expecting to see and since it is unlikely that we will be getting
Friday’s Labor Department report, more attention was given to this data
than usual. The weaker number is good news for the bond market and
mortgage rates because it indicates the employment sector was not as
strong as many had thought.
Some media outlets are reporting that the weekly unemployment figures
will be posted tomorrow morning as scheduled. There are conflicting
reports on the accuracy of this, leaving us confused. Analysts are
expecting to see that 315,000 new claims for unemployment benefits were
filed last week, up from 305,000 of the previous week. Rising initial
claims indicates a softening employment sector, so the larger the number,
the better the news it is for the bond market and mortgage rates. If it
will be posted, it will be at 8:30 AM ET tomorrow.
Fed Chairman Bernanke is scheduled to speak at a community banking
conference in the St. Louis area this afternoon. The topic of his speech
likely would not have been a headline grabber, but considering the
circumstances with the government shutdown and lack of key economic data
this week, more attention will be given to this event. Any comments or
questions on the economic impact of the government shutdown may move the
markets during late afternoon trading. He is expected to speak at 3:00 PM
ET, so any reaction will come after that time.
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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