January 6th, 2010 9:43 AM by Lehel S.
Wednesday's bond market has opened in negative territory despite a flat open in stocks. The stock markets are not showing much direction with the Dow up 3 points and the Nasdaq down 2 points. The bond market is currently down 14/32, but we should see little change in this morning's mortgage rates due to strength late yesterday.
There is no relevant economic data being posted this morning. This afternoon brings us the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed's thinking and concerns regarding inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn't affect the markets or mortgage rates until afternoon hours.
The only semi-relevant data scheduled for release tomorrow are weekly unemployment figures from the Labor Department. They are expected to say that 445,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week and would be considered fairly good news for bonds. However, since this data tracks only a week's worth of new claims, its impact on mortgage rates is usually minimal unless it varies greatly from analysts' forecasts.
Friday's data is the big news of the week. The Labor Department will post December's employment figures early Friday morning. The Employment report is considered to be one of the most important monthly releases we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Its results are expected to heavily influence the markets and mortgage rates.
Current forecasts are calling for a 0.1% increase in the unemployment rate, pushing it to 10.1%. Analysts are expecting to see little change in payrolls from November's level with earnings rising 0.2%. If we see weaker than expected results, mortgage rates should improve Friday. However, stronger than expected readings will likely fuel a stock market rally and push mortgage rates higher.
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... 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.