March 18th, 2010 11:21 AM by Lehel S.
Thursday's bond market has opened relatively flat after this morning's key inflation data failed to give us any surprises. The stock markets are mixed with the Dow currently up a few points while the Nasdaq has slipped 2 points. The bond market is currently down 2/32, which should keep this morning's mortgage rates very close to yesterday's levels.
There were technically three reports posted this morning that are worth noting, but by far the most important was February's Consumer Price Index (CPI). The Labor Department said that this important measurement of inflation at the consumer level of the economy was unchanged from January. This was slightly weaker than thought, but having more of an impact on trading was the 0.1% increase in the core data reading that excludes more volatile food and energy prices. Even though this matched forecasts, the fact that it did not show a stronger than expected reading has helped make bonds favorable this morning.
The Labor Department also gave us last week's unemployment figures, reporting that 457,000 new claims for unemployment benefits were filed last week. This was a little higher than what was expected, but since the release tracks only a single week's worth of claims it takes a large variance for it to significantly influence bond trading or mortgage pricing.
The Conference Board posted its Leading Economic Indicators (LEI) for February late this morning. It revealed a 0.1% increase, meaning economic activity should expand slightly over the next several months. This is index is considered to be moderately important to the markets and mortgage rates, so its influence on rates is fairly minimal also.
There is no relevant economic data scheduled for release tomorrow, so look for the stock markets to influence bond trading and mortgage rates. Tomorrow is an important option expiration date, which could translate into a fairly volatile day for the majo r stock indexes. This means we may see swings in stock prices throughout the day, but I don't believe it will significantly impact mortgage rates. Tomorrow will likely be a fairly calm day for the mortgage market.
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... 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.