October 7th, 2009 8:57 AM by Lehel S.
Wednesday's bond market has opened in positive territory despite a lack of factual economic data being posted today. The stock markets are showing minor gains after a strong two-day rally. The Dow is currently down 24 points while the Nasdaq has slipped 2 points. The bond market is currently up 15/32, but I don't think we will see much of a change in this morning's mortgage rates as lenders wait for today's debt sale before making any adjustments.
There is no relevant economic data scheduled for release today, but we do have the 10-year Treasury Note auction to contend with. This sale will give us an important measure of investor interest in longer-term U.S. debt, particularly from international buyers. If there is a strong demand in the sale, we should see the broader bond market rally and mortgage rates move lower after the results are posted at 1:00 PM ET. However, a lackluster interest in the sale would likely lead to higher mortgage rates this aftern oon.
The only semi-relevant economic news scheduled to be posted tomorrow are weekly unemployment figures from the Labor Department. They are expected to say that 540,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week. However, unless there is a wide variance between the actual number and the forecasted number of new claims, this data will likely have a minimal impact on bond trading and mortgage rates.
The 30-year Bond auction is tomorrow also. It is less important to mortgage rates than today's 10-year Note sale, but its' announced results can influence bond trading enough to revise mortgage rates slightly tomorrow afternoon. The same principals apply as today's sale. A strong demand is good news for bonds while a weak sale could lead to higher mortgage rates late tomorrow.
The only factual economic data of the week will be posted Friday morning. August's Goods and Services T rade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates. It is expected to show a $32.9 billion trade deficit.
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.