Monday, September 15th
Monday’s bond market has opened in positive territory as traders prepare for this week’s busy calendar. Stocks are showing early gains also, pushing the Dow up 16 points and the Nasdaq up 141 points. The bond market is currently up 6/32 (4.04%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.
6/32
Bonds
30 yr - 4.04%
16
Dow
45,850
141
NASDAQ
22,282
Trailing 90 Days - National Average
High
Unknown
There is no relevant economic data set for release today. The remainder of the week is quite busy with economic reports, a Treasury auction and another FOMC meeting for the markets to digest. This week’s FOMC meeting is expected to produce the first Fed rate cut since last December, but the size of that reduction is still being debated.
High
Unknown
Activities begin at 8:30 AM ET tomorrow when August’s Retail Sales report is posted. It tracks consumer spending that fuels economic growth because it makes up over two-thirds of the U.S. economy. If consumer spending is strong, overall economic growth is likely to be stronger, making bonds less attractive to investors. If we see weaker than expected readings in this report, the bond market should respond favorably, pushing mortgage rates lower. Current forecasts show a 0.3% increase in sales. Good news for the bond market and mortgage pricing would be a decline.
Medium
Unknown
August’s Industrial Production report will also be released tomorrow morning, giving us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting to see production was unchanged from July's level, a sign that manufacturing activity was flat last month. A large increase in production would be negative for bonds and mortgage rates, while a noticeable decline would be favorable for mortgage shoppers.
Medium
Unknown
Tomorrow also has the week’s Treasury auction that may come into play during afternoon trading. 20-year Treasury Bonds are being sold tomorrow with results set to be announced at 1:00 PM ET. If investor demand for the securities was strong, we could see afternoon bond strength that leads to a slight improvement to mortgage rates before the end of the day. On the other hand, a lackluster interest in the securities may create selling in the broader bond market that leads to a slight upward revision to mortgage rates.
---
Unknown
Overall, Wednesday is easily the most important day for rates because of the FOMC events, but tomorrow’s Retail Sales report can be a market mover also. The calmest day may end of being Friday. We are expecting to see a great deal of volatility in the markets this week, meaning mortgage rates will not remain flat. If still floating an interest rate and closing in the near future, it would be prudent to keep an eye on the markets.
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... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.