Tuesday's bond market has opened up slightly as investors await today's news. The stock markets are showing early losses with the Dow down 20 points and the Nasdaq down 8 points. The bond market is currently up 5/32, which should improve this morning's mortgage rates slightly. Today's only relevant news comes this afternoon when the minutes from the last FOMC meeting will be released at 2:00 PM. Market participants are interested in how divided the Fed is towards rate cuts and possible future moves. The minutes give us insight to their current thought process and individual Fed member opinions. Any surprises could cause afternoon volatility in the markets later today and possible changes in mortgage pricing. The first piece of monthly data is February's Goods and Service Trade Balance report Thursday morning. This data gives us the size of the U.S. trade deficit, but unless it varies greatly from forecasts, it likely will not cause much movement in mortgage rates. There is a 10 year Treasury Inflation Protected Security (TIPS) sale Thursday also. We could see some weakness in bonds ahead of the sale as investing firms sell current holdings to prepare for it. This weakness is usually only temporary if the sales are met with a decent demand. The results of the sale will be posted at 1:00 PM ET. If the demand from investors was strong, the bond market could rally during afternoon trading, leading to lower mortgage rates. If the sales were met with a poor demand, the afternoon weakness may cause upward revisions to mortgage pricing Thursday afternoon. In the meantime, watch for this afternoon's Fed minutes. I suspect they may remind us of the Fed's concerns about inflation. This could lead to afternoon selling and possibly upward revisions to mortgage rates. Accordingly, I am extending the lock recommendation to include short-term periods also. If I were considering financing/refinan cing 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 borrower/s. | ||||||||
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Good Ole Super Ben is always good for at least a 100 point drop in the market day :-) Thanks for the info Chris.
Apr 08, 2008 05:25 AM
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