November 3rd, 2009 10:33 AM by Lehel S.
Tuesday's bond market has opened in negative territory again despite early stock losses. The Dow is currently down 55 points while the Nasdaq is down 12 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.
September's Factory Orders report was posted late this morning, revealing a 0.9% increase in new orders. This matched forecasts, therefore, has had little impact on this morning's bond trading or mortgage rates.
There is no important data scheduled for release tomorrow, but the FOMC meeting will adjourn tomorrow afternoon. There is almost no possibility of the Fed raising key short-term interest rates this week. But market participants will be looking at the post-meeting statement for any indication of when the Fed may make a move. The meeting will adjourn at 2:15 PM ET tomorrow, so look for any reaction to the statement to come during afte rnoon hours. Generally speaking, any hint of a rate increase coming relatively soon would be negative news for bonds and lead to higher mortgage rates.
Thursday's data is relatively important to the bond market. This report is the 3rd Quarter Productivity reading. It is expected to show a level of worker productivity during the third quarter equivalent to last quarter's final reading of 6.6%. Analysts have forecasted a 6.4% rise in worker output. A larger increase would be good news for the bond market because high levels of productivity allows the economy to expand without inflationary pressures being a concern.
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.