Monday, October 6th
Monday’s bond market has opened in negative territory to start the week with an increase in mortgage pricing. Stocks are mixed with the Dow down 270 points and the Nasdaq up 101 points. The bond market is currently down 8/32 (4.14%), which with Friday’s afternoon weakness should cause this morning’s mortgage rates to be approximately .250 of a discount point higher than Friday’s early pricing.
8/32
Bonds
30 yr - 4.14%
270
Dow
46,488
101
NASDAQ
22,882
Trailing 90 Days - National Average
Low
Negative
There is nothing scheduled today that is expected to influence bond trading or mortgage pricing. It appears weakness in the Japanese bond market following a political shift there is spilling into the global markets, including U.S. Treasury securities. This is the much more the reason for this morning’s early bond weakness than any political or economic headlines here.
Low
Unknown
The remainder of the week has only one relevant monthly economic report set for release. This week’s light economic calendar was previously scheduled this way and not a result of the government shutdown. That said, the shutdown would have prevented any governmental reports from being posted if they had been scheduled and may block three major reports from being released next week. We were expected to get two key inflation readings and an important consumer spending report next week before the shutdown started. Since it doesn’t look like a compromise will be reached in Washington DC anytime soon, the shutdown, and delayed economic reports, may continue for quite a while.
Medium
Unknown
In addition to that single moderately important economic release that comes Friday morning, there are also two midweek Treasury auctions and the release of the minutes from last month’s FOMC meeting that are not affected by the shutdown. This is also another packed week of Fed-member speaking engagements that may draw a reaction in the markets any day, especially with little data to drive trading.
Medium
Unknown
We have a large number of Fed-member speaking appearances scheduled this week with multiple being made several days. They include a video-taped opening remarks for a community banking conference by Fed Chairman Powell early Thursday morning. These speeches often are about mundane topics, but sometimes they involve discussions about the economy, inflation and how the Fed reacts to those matters. Any surprise comments, particularly about the Fed's thoughts about the employment sector, inflation or future plans with key interest rates, could cause a strong reaction in the financial and mortgage markets.
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Unknown
Overall, no day stands out as a good candidate for most important day for rates. The same can be said about a particularly calm day. The FOMC minutes aren’t likely to yield any big surprises and Friday’s economic release is considered to be only moderately important to the markets. It may end up being Wednesday afternoon’s auction results announcement that draws the strongest reaction in the bond market and mortgage pricing. While it appears to be a light week in terms of expected movement in mortgage rates, it could be something unplanned that may cause a big move in rates. Therefore, it would still be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.
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.