Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!Monday’s bond market has opened in positive territory, recovering part of Friday’s sell-off. The stock markets are showing modest gains with the Dow up 20 points and the Nasdaq up 3 points. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point from Friday’s morning rates.
This week is fairly light in terms of the number of economic releases scheduled for release. There are only three on the agenda but one of them is considered to be very important and can heavily influence the markets and mortgage pricing. In addition, there are two Treasury auctions the middle part of the week that may hurt or help boost bond prices, depending on how strong of a demand there is for the sales. Since all of the relevant data is scheduled for release Thursday and Friday, the most movement in rates will likely be the middle or latter part of the week.
Fed Chairman Bernanke will be speaking to the Economic Club of Washington D.C. at noon today. This is not considered to be an important speech and likely will not influence mortgage rates. However, whenever he speaks publicly, the possibility does exist that his words could rattle or rally the markets. I am not concerned about this one and don’t feel there should be much attention placed on it.
There is no relevant economic news scheduled for release today, tomorrow or Wednesday. October’s Goods and Services Trade Balance report will be posted early Thursday morning. This report gives the size of the U.S. trade deficit, but it is the week’s least important release. It is expected to show a $37.0 billion trade deficit. Unless it varies greatly from forecasts, I don’t expect it to affect mortgage pricing.
Overall, expect to see a pretty volatile second half of the week with the biggest moves in mortgage pricing likely to come Wednesday or Friday. Friday’s Retail Sales report can cause a great deal of movement in rates, but Wednesday’s Treasury auction may also help determine if rates will close the week higher or lower than tomorrow’s opening levels. It will also be interesting to see if bonds extend Friday’s selling into tomorrow’s trading or if they recover some of those losses. This looks to be one of those weeks that maintaining contact with your mortgage professional would be wise.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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...
©Mortgage Commentary 2009
Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com
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