This week brings us the release of five pieces of data for the markets to digest. The most important news will be posted late in the week, so we may see the most movement in rates during those days. The first part of the week will likely be driven by stock market gains or losses.
The week's first but least important data is April's Goods and Services Trade Balance report Tuesday morning. This report gives us the size of the U.S. trade deficit and will be released at 8:30 AM. It isn't likely to cause much movement in the markets or mortgage rates, but nevertheless forecasts are expecting to see a $59.5 billion deficit.
Late Wednesday, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher Wednesday afternoon.
May's Retail Sales data will be released Thursday morning. This report measures consumer spending, which is important to the bond market because consumer spending makes up two-thirds of the U.S. economy. Analysts are expecting to see that sales rose 0.6% last month. A smaller than expected rise in sales would be good news for the bond market and could lead to lower mortgage rates Thursday.
There are two reports scheduled for release Friday. The first is May's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy. This is one of the most important reports we see each month. There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food an d energy prices. A large increase could raise fear in the bond market that inflation is a threat. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond's future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 0.5% in the overall index and a 0.2% rise in the core data.
The last report of the week is June's preliminary reading to the University of Michigan Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 57.5. A larger then expected decline in consumer confidence would be considered good news for bonds, however, CPI report is much more likely to have a bigger impact on the markets than this one will.
Overall, it is going to be a fairly busy week for the financial markets. We will likely see the biggest changes to mortgage rates the latter part of the week. I feel that Friday will be the single most important day of the week but Thursday also is likely to bring significant movement in rates. Accordingly, this would be a very good week to maintain fairly constant contact with your mortgage professional.
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... Lock 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.
Monday, June 9, 2008
Tuesday, June 3, 2008
Interest Rate & Market Update 06/03/2008
Tuesday's bond market has opened in negative territory following the release of stronger than expected economic data and early stock gains. The stock markets are in positive territory with the Dow up 25 points and the Nasdaq up 20 points. The bond market is currently down 13/32, but we likely will not see much change in this morning's mortgage rates due to strength in bonds late yesterday.
The Commerce Department reported late this morning that April's Factory Orders rose 1.1%. This greatly exceeded forecasts of a 0.1% decline and indicated that the manufacturing sector was stronger than thought. This is considered to be negative news for bonds and mortgage rates because a growing manufacturing sector is a strong sign of overall economic growth.
Tomorrow morning brings us the release of two pieces of economic data for the markets to digest. The first is the revised 1st Quarter Productivity and Costs reading. This index measures employee output a nd employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high, so this type of data can influence trading and mortgage rates. Last month's preliminary reading revealed a 2.2% rate, but I don't think this revision will have much of an impact on the bond market or mortgage pricing unless it varies greatly from its forecasted reading of 2.5%.
The second report of the day may have a significant impact on the markets or be a non-factor depending on its result. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 51.0, with the same principals as Monday's manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have n o influence on the markets and mortgage pricing.
There is no relevant data scheduled for release Thursday except weekly unemployment figures. However, market participants will be preparing for Friday's key Employment report for the month of May. This report will likely lead to plenty of volatility in the markets even if its results vary slightly from forecasts.
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... Lock 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.
The Commerce Department reported late this morning that April's Factory Orders rose 1.1%. This greatly exceeded forecasts of a 0.1% decline and indicated that the manufacturing sector was stronger than thought. This is considered to be negative news for bonds and mortgage rates because a growing manufacturing sector is a strong sign of overall economic growth.
Tomorrow morning brings us the release of two pieces of economic data for the markets to digest. The first is the revised 1st Quarter Productivity and Costs reading. This index measures employee output a nd employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high, so this type of data can influence trading and mortgage rates. Last month's preliminary reading revealed a 2.2% rate, but I don't think this revision will have much of an impact on the bond market or mortgage pricing unless it varies greatly from its forecasted reading of 2.5%.
The second report of the day may have a significant impact on the markets or be a non-factor depending on its result. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 51.0, with the same principals as Monday's manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have n o influence on the markets and mortgage pricing.
There is no relevant data scheduled for release Thursday except weekly unemployment figures. However, market participants will be preparing for Friday's key Employment report for the month of May. This report will likely lead to plenty of volatility in the markets even if its results vary slightly from forecasts.
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... Lock 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.
Friday, May 30, 2008
Interest Rate & Market Update 04/30/2008
Friday's bond market has opened in positive territory after this morning's economic news failed to bring any negative surprises. The stock markets are in positive territory with the Dow up 15 points and the Nasdaq up 13 points. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .375 of a discount point.
There were two pieces of economic data released this morning. The first was April's Personal Income and Outlays data that showed personal income and spending both rose 0.2% last month. Forecasts were calling for an increase of 0.2% in both readings, indicating that consumer spending and their ability to spend rose modestly.
The second report of the day came from the University of Michigan who updated their Index of Consumer Sentiment for May. Today's revision revealed a reading of 59.8 that was up slightly from the earlier estimate of 59.5. This means that consumer sentiment was slightl y stronger this month than previously thought, but not enough to have much of an impact on bonds or mortgage pricing.
Even with this morning's gains, I still believe they overall tone in the bond market is more negative than positive. This will likely lead to not only volatility in bonds but also possibly intra-day changes to mortgage rates. Accordingly, I am holding the lock recommendations for the time being.
Next week is busy with several important economic releases scheduled for the markets to digest. It begins with Monday's release of May's ISM manufacturing index and ends with Friday's posting of May's Employment report. It will likely be another active week in the mortgage market, but look for details on next week's events in Sunday's weekly preview.
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... Lock 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.
There were two pieces of economic data released this morning. The first was April's Personal Income and Outlays data that showed personal income and spending both rose 0.2% last month. Forecasts were calling for an increase of 0.2% in both readings, indicating that consumer spending and their ability to spend rose modestly.
The second report of the day came from the University of Michigan who updated their Index of Consumer Sentiment for May. Today's revision revealed a reading of 59.8 that was up slightly from the earlier estimate of 59.5. This means that consumer sentiment was slightl y stronger this month than previously thought, but not enough to have much of an impact on bonds or mortgage pricing.
Even with this morning's gains, I still believe they overall tone in the bond market is more negative than positive. This will likely lead to not only volatility in bonds but also possibly intra-day changes to mortgage rates. Accordingly, I am holding the lock recommendations for the time being.
Next week is busy with several important economic releases scheduled for the markets to digest. It begins with Monday's release of May's ISM manufacturing index and ends with Friday's posting of May's Employment report. It will likely be another active week in the mortgage market, but look for details on next week's events in Sunday's weekly preview.
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... Lock 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.
Thursday, May 29, 2008
Interest Rate & Market Update 05/29/2008
Thursday's bond market has opened in negative territory as investor interest appears to be shifting towards stocks and non-mortgage related securities. The stock markets are showing gains with the Dow up 47 points and the Nasdaq up 14 points. The bond market is currently down 23/32, which will likely push this morning's mortgage rates higher by approximately .500 of a discount point.
There were two pieces of economic data released this morning. The first was the preliminary revision to the 1st quarter Gross Domestic Product (GDP). It matched forecasts with a 0.9% annual pace of growth that was an upward revision from the initial estimate. An important inflation reading in the data also matched forecasts, so today's report didn't reveal any surprises.
The Labor Department gave us last week's unemployment figures, saying that 372,000 new claims for benefits were filed during the week. This was slightly above the 370,000 that was expected, so had little impact on bond trading or mortgage rates because this data is generally of low importance to the markets unless it varies greatly from forecasts.
Tomorrow brings us the release of two pieces of data with the first being April's Personal Income and Outlays data at 8:30 AM. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.2% rise in income and a 0.2% increase in spending. Weaker readings would be considered good news for bonds and mortgage rates.
The last report of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It measures consumer willingness to spend by tracking their confidence in their own f inancial situations. An upward revision from the preliminary 59.5 reading would be considered a negative for bonds.
Yesterday's bond weakness that has carried over into this morning's trading pretty much answers the question proposed yesterday if 4.00% is going to be a level of upward resistance. There seemed to be very little resistance as bond prices dropped over the past 24 hours and the yield on the benchmark 10-year Note shot up to 4.10%. I suspect that this may now be the lower end of a new trading range if this level holds for another day. That means that bond prices are more likely to fall than they are to rise, leading to upward movement in yields and mortgage rates. Accordingly, I am holding the lock recommendations across the board until we have stability below that level.
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... Lock 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.
There were two pieces of economic data released this morning. The first was the preliminary revision to the 1st quarter Gross Domestic Product (GDP). It matched forecasts with a 0.9% annual pace of growth that was an upward revision from the initial estimate. An important inflation reading in the data also matched forecasts, so today's report didn't reveal any surprises.
The Labor Department gave us last week's unemployment figures, saying that 372,000 new claims for benefits were filed during the week. This was slightly above the 370,000 that was expected, so had little impact on bond trading or mortgage rates because this data is generally of low importance to the markets unless it varies greatly from forecasts.
Tomorrow brings us the release of two pieces of data with the first being April's Personal Income and Outlays data at 8:30 AM. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.2% rise in income and a 0.2% increase in spending. Weaker readings would be considered good news for bonds and mortgage rates.
The last report of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It measures consumer willingness to spend by tracking their confidence in their own f inancial situations. An upward revision from the preliminary 59.5 reading would be considered a negative for bonds.
Yesterday's bond weakness that has carried over into this morning's trading pretty much answers the question proposed yesterday if 4.00% is going to be a level of upward resistance. There seemed to be very little resistance as bond prices dropped over the past 24 hours and the yield on the benchmark 10-year Note shot up to 4.10%. I suspect that this may now be the lower end of a new trading range if this level holds for another day. That means that bond prices are more likely to fall than they are to rise, leading to upward movement in yields and mortgage rates. Accordingly, I am holding the lock recommendations across the board until we have stability below that level.
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... Lock 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.
Tuesday, May 27, 2008
Interest Rate & Market Update 05/27/2008
Tuesday's bond market has opened down slightly despite a weaker than expected consumer confidence reading. The stock markets are mixed with the Dow down 10 points and the Nasdaq up 9 points. The bond market is currently down 7/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.
The Conference Board started this week's economic releases with their Consumer Confidence Index (CCI) May. It showed a weaker than expected level of confidence with a reading of 57.2 when it was forecasted to stand at 60.0. This was the lowest reading in 16 years, indicating that consumers are not very optimistic about their personal financial situations. This is considered good news for bonds and mortgage rates because it usually means consumers are less likely to make large purchases in the near future.
April's New Home Sales data was also released today, revealing a higher level of sales than was expected. However , today's report also revised March's sales lower. This means that sales were weaker than thought in March, but the month to month increase was fairly large. This is bad news for bonds because a weak housing sector usually translates into weaker economic conditions in general. But, this data is not considered to be of high importance to the bond market and mortgage rates, so its impact on today's pricing was fairly minimal.
Tomorrow morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 1.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a larger than expected drop, we should see rates improve tomorrow morning.
If I were considering financing/refinancin g 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.
The Conference Board started this week's economic releases with their Consumer Confidence Index (CCI) May. It showed a weaker than expected level of confidence with a reading of 57.2 when it was forecasted to stand at 60.0. This was the lowest reading in 16 years, indicating that consumers are not very optimistic about their personal financial situations. This is considered good news for bonds and mortgage rates because it usually means consumers are less likely to make large purchases in the near future.
April's New Home Sales data was also released today, revealing a higher level of sales than was expected. However , today's report also revised March's sales lower. This means that sales were weaker than thought in March, but the month to month increase was fairly large. This is bad news for bonds because a weak housing sector usually translates into weaker economic conditions in general. But, this data is not considered to be of high importance to the bond market and mortgage rates, so its impact on today's pricing was fairly minimal.
Tomorrow morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 1.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a larger than expected drop, we should see rates improve tomorrow morning.
If I were considering financing/refinancin g 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.
Friday, May 23, 2008
Interest Rate & Market Update 05/23/2008
Friday's bond market has opened in positive territory as stocks react negatively to rising oil prices. The stock markets are showing sizable losses with the Dow down 111 points and the Nasdaq down 27 points. The bond market is currently up 14/32, which will likely improve this morning's mortgage rates by approximately .1250 - .250 of a discount point.
The National Association of Realtors gave us today's only semi-relevant economic news with the release of April's Existing Home Sales report. It revealed a decline in sales, but not as much of a drop as expected. However, the data has not influenced bond trading enough to affect mortgage rates this morning.
The bond market will close at 2:00 PM today ahead of Monday's Memorial Day Holiday and will remain closed until Tuesday morning. The stock markets will also be closed Monday. I don't think that this will have an impact on this afternoon's mortgage rates.
Next week brings us the releas e of several pieces of important economic data. There are relevant reports scheduled for release each of the four business days, so we will likely see some volatility in rates. Look for more details on next week's events in Sunday's weekly preview.
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.
The National Association of Realtors gave us today's only semi-relevant economic news with the release of April's Existing Home Sales report. It revealed a decline in sales, but not as much of a drop as expected. However, the data has not influenced bond trading enough to affect mortgage rates this morning.
The bond market will close at 2:00 PM today ahead of Monday's Memorial Day Holiday and will remain closed until Tuesday morning. The stock markets will also be closed Monday. I don't think that this will have an impact on this afternoon's mortgage rates.
Next week brings us the releas e of several pieces of important economic data. There are relevant reports scheduled for release each of the four business days, so we will likely see some volatility in rates. Look for more details on next week's events in Sunday's weekly preview.
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.
Thursday, May 22, 2008
Interest Rate & Market Update 05/22/2008
hursday's bond market has opened down sharply as concerns about inflation take their toll. The stock markets are showing moderate gains with the Dow up 37 points and the Nasdaq up 14 points. The bond market is currently down 27/32, which will likely push this morning's mortgage rates higher by approximately .250 - .375 of a discount point.
The Labor Department gave us today's only economic reading with the release of weekly unemployment figures. They reported that 365,000 new claims for benefits were filed last week. This was down from the previous week and lower than the 372,000 that were expected. However, this data is not considered to be of high importance and had a minimal impact on today's bond trading or mortgage rates.
Yesterday's release of the minutes from the last FOMC meeting led to some volatility in the markets late yesterday and again this morning. The minutes revealed that the vote for the last rate cut was close and that ther e are obvious concerns not only about economic growth and activity but also about inflation. This has made long-term securities such as mortgage related bonds less attractive to investors because inflation erodes the value of a bond's future fixed interest payments. Traders then need to sell them at a discount to offset that loss in order for an investor to purchase it. The result is bond prices falling while yields and mortgage rates rise.
The National Association of Realtors will give us the Existing Home Sales report tomorrow morning. This data tracks resales of homes in the U.S., giving us a measurement of housing sector strength. It is not considered to be of much importance to the bond market unless it varies greatly from forecasts. Current forecasts are calling for a decline in sales between March and April.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing w as 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.
The Labor Department gave us today's only economic reading with the release of weekly unemployment figures. They reported that 365,000 new claims for benefits were filed last week. This was down from the previous week and lower than the 372,000 that were expected. However, this data is not considered to be of high importance and had a minimal impact on today's bond trading or mortgage rates.
Yesterday's release of the minutes from the last FOMC meeting led to some volatility in the markets late yesterday and again this morning. The minutes revealed that the vote for the last rate cut was close and that ther e are obvious concerns not only about economic growth and activity but also about inflation. This has made long-term securities such as mortgage related bonds less attractive to investors because inflation erodes the value of a bond's future fixed interest payments. Traders then need to sell them at a discount to offset that loss in order for an investor to purchase it. The result is bond prices falling while yields and mortgage rates rise.
The National Association of Realtors will give us the Existing Home Sales report tomorrow morning. This data tracks resales of homes in the U.S., giving us a measurement of housing sector strength. It is not considered to be of much importance to the bond market unless it varies greatly from forecasts. Current forecasts are calling for a decline in sales between March and April.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing w as 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.
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