October 30th, 2009 10:58 AM by Lehel S.
Friday's bond market has opened in positive territory after this morning's economic data failed to show any significant surprises and the stock markets opened with losses. Stocks are starting the next leg of their recent roller coaster ride with sizable losses. The Dow has given back over half of yesterday's rally with a loss of 109 points so far. The Nasdaq is not fairing much better with a 20 point loss. The bond market is currently up 11/32, but I don't believe we will see much of a change in this morning's mortgage rates compared to yesterday's morning rates due to weakness in bonds late yesterday.
The first of today's three reports was the 3rd Quarter Employment Cost Index (ECI). It showed an increase of 0.4% that matched forecasts. This means that employer costs for wages and benefits rose moderately during the third quarter, but this was expected. Therefore, its' impact on today's trading and mortgage rates has been minimal.
September's Personal Income and Outlays report was the second, revealing no change in personal income last month and a 0.5% decline in spending. These figures pegged analysts' expectations and also have not influenced today's mortgage pricing.
The third and final report of the day was the University of Michigan's update to their Index of Consumer Sentiment for October. They announced a reading of 70.6 that exceeded forecasts of a 70.0 reading. This means that consumers were a little more optimistic about their own financial situations than many had thought. That can be considered bad news for bonds but since this data is only moderately important, it fortunately has been unable to prevent bonds from rising this morning.
Yesterday's 7-year Note auction was met with an average demand. It can't be considered weak or strong. Some of the components that measure the success of the sales pointed towards less interest than Wednesday's auction, but not by enough to ca use much concern.
Next week is extremely busy in terms of economic reports being posted. Unlike many, we will see important data posted this Monday. The Institute for Supply Management (ISM) will post their manufacturing index late Monday morning. It is considered to be one of the more important reports we get each month, but it will not be the most important data next week. In addition the data, that includes the monthly employment figures, we also have another FOMC meeting to watch for. Look for more details on next week's events in Sunday's weekly preview.
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... 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.