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Thursday'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 showing moderate strength during early trading with the Dow up 53 points and the Nasdaq up 10 points. The bond market is currently down 13/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point compared to yesterday's morning rates.
The Labor Department gave us both of this morning's releases. The more important of the two was the 1st Quarter Productivity and Costs data that revealed a larger than expected 0.8% increase in worker output. The bad news came from the Unit Labor Costs reading that showed a 3.3% increase. That was higher than the 2.7% that was forecasted, meaning employer costs were higher than thought. Higher costs can translate to wage inflation concerns, therefore, this portion of the report is a negative for bonds.
The second bit of news was last week's unemployment figures. It showed that 601,000 new claims for benefits were filed last week. This is a three month low and was well below forecasts of 635,000, but fortunately this data is not considered to be highly influential on mortgage rates. However, it does raise additional concern about tomorrow's monthly report.
Yesterday's 10-year Note sale was met with a decent demand from investors. That led to improvements in bonds during afternoon trading yesterday and some lenders to revise mortgage pricing lower. The Treasury will sell 30-year Bonds today, posting the results at 1:30 PM ET. Another round of strong bidding could cause bonds to get back some of this morning's earlier losses. However, I suspect that most mortgage lenders will wait until tomorrow's big news rather than revising their rates this afternoon.
Tomorrow morning brings us the release of the almighty Employment report, giving us April's employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected.
It could turn out to be a wonderful day in the mortgage market tomrrow, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month.
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.
Showing posts with label interest rates. Show all posts
Showing posts with label interest rates. Show all posts
Thursday, May 7, 2009
Thursday, April 23, 2009
Daily Rate info, Thursday 23rd
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Thursday's bond market has opened fairly flat after this morning's economic news failed to give us any significant surprises. The stock markets are showing early losses with the Dow down 23 points and the Nasdaq down 6 points. The bond market is currently down 4/32, but we still will likely see an improvement of .125 of a discount point in this morning's mortgage rates due to strength in bonds late yesterday.
The Labor Department reported this morning that 640,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts so has had little impact on this morning's bond trading and mortgage rates.
The second report released this morning came from the National Association of Realtors who said that home resales fell 3% last month. This was a larger decline than expected and indicates that the housing sector is not ready to rebound yet. This is good news for bonds, but this data is not considered to be a highly important piece of data. Therefore, its results also have not heavily influenced this morning's mortgage rates.
March's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates tomorrow.
The last report of the week will be March's New Home Sales data but it is the least important release of the week. It tracks approximately 15% of all home sales in the U.S., so its impact on bonds will likely be less than today's report that covered the other 85% of home sales. It is expected to show little change in sales from February's levels.
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.
©Mortgage Commentary 2009
View all homes in Mobile, AL at, www.homes4mobile.com
Thursday's bond market has opened fairly flat after this morning's economic news failed to give us any significant surprises. The stock markets are showing early losses with the Dow down 23 points and the Nasdaq down 6 points. The bond market is currently down 4/32, but we still will likely see an improvement of .125 of a discount point in this morning's mortgage rates due to strength in bonds late yesterday.
The Labor Department reported this morning that 640,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts so has had little impact on this morning's bond trading and mortgage rates.
The second report released this morning came from the National Association of Realtors who said that home resales fell 3% last month. This was a larger decline than expected and indicates that the housing sector is not ready to rebound yet. This is good news for bonds, but this data is not considered to be a highly important piece of data. Therefore, its results also have not heavily influenced this morning's mortgage rates.
March's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates tomorrow.
The last report of the week will be March's New Home Sales data but it is the least important release of the week. It tracks approximately 15% of all home sales in the U.S., so its impact on bonds will likely be less than today's report that covered the other 85% of home sales. It is expected to show little change in sales from February's levels.
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.
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