Tuesday, June 17th
Tuesday’s bond market has opened in positive territory following favorable economic news. Stocks are showing minor losses of 43 points in the Dow and 51 points in the Nasdaq. The bond market is currently up 5/32 (4.43%), which should keep this morning’s mortgage rates close to Monday’s early levels. If you saw an intraday revision to rates yesterday afternoon, you likely saw most of that move reversed this morning.
5/32
Bonds
30 yr - 4.43%
43
Dow
42,471
51
NASDAQ
19,649
Trailing 90 Days - National Average
Medium
Positive
Yesterday’s 20-year Treasury Bond auction followed suit of last week’s two long-term security sales by drawing a decent demand from investors. The benchmarks pointed to an above average demand compared to other recent sales. There was some movement in bonds yesterday afternoon that led to a couple of major lenders issuing an intraday improvement in rates and other raising them slightly. However, they don’t seem to be a direct response to the auction results that were posted at 1:00 PM ET. The moves began well before the results announcement, meaning the auction didn’t have a noticeable influence on rates.
High
Positive
This morning’s big economic news was the release of May's Retail Sales report at 8:30 AM ET that showed consumers spent less than many analysts had thought. The 0.9% decline in overall sales was weaker than forecasts of a 0.6% decline. If more volatile and costly auto transactions are excluded, sales fell 0.3%. Analysts were expecting to see a 0.1% increase in this reading. Furthermore, both readings for April were revised lower than previously estimated. Today’s report shows consumers spent less last month than they did in April. This is very good news for the bond market and mortgage rates because slowing consumer spending restricts broader economic growth.
Medium
Positive
Also released this morning was May's Industrial Production data. The 9:15 AM ET release revealed output at U.S. factories, mines and utilities slipped 0.2% last month. Forecasts had the report showing a slight increase in production. This means parts of the manufacturing sector were weaker than predicted, making the data good news for bonds and mortgage pricing.
Low
Unknown
Tomorrow brings us the release of a minor economic report in the morning and an afternoon of highly important Fed events. May's Housing Starts report will begin the day’s activities at 8:30 AM ET. It tells us the number of new home groundbreakings. This is not considered to be as important as other housing reports and usually has a minimal impact on mortgage rates. Market analysts are expecting to see a small decline in new home construction starts last month. Good news for the bond market and mortgage rates would be a noticeable decline in groundbreakings.
High
Unknown
The afternoon events start at 2:00 PM ET when this week's FOMC meeting adjourns. This meeting also includes revised economic projections from the Fed and a post-meeting press conference with Fed Chairman Powell. There is a strong consensus that the Fed will leave key short-term interest rates unchanged at this meeting. They have previously stated they will be taking a wait and see approach towards key rates to see how tariffs and other administration policies affect inflation and overall economic activity. Now they also have the Iran / Israel conflict to consider and how it may impact the global economy. These are the topics that the markets will be paying attention to in the Fed's post-meeting statement, economic and interest rate predictions (dot plot) and comments made during the press conference.
High
Unknown
The Fed's revised projections will give us their predictions for overall economic growth (GDP), unemployment, inflation and future rate adjustments. Along with the meeting adjournment, we will also get the post-meeting statement and economic forecasts at 2:00 PM ET. The press conference with Chairman Powell will begin at 2:30 PM ET, meaning these events will affect trading and mortgage rates mid and late afternoon tomorrow.
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... 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.