May 19th, 2010 5:01 PM by Lehel S.
Wednesday's bond market initially opened in negative territory but has since erased those gains as stock prices started to fall. The stock markets are in selling mode again with the Dow down 122 points and the Nasdaq down 27 points. The bond market is currently up 2/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.
Today's important inflation data gave us favorable results. The Labor Department reported that the Consumer Price Index (CPI) fell 0.1% last month when it was expected to rise slightly. Even better news was the core data reading that showed no change from March when it was expected to rise slightly. This means that inflationary pressures at the consumer level of the economy were lighter than thought. That is good news for rates because it makes long-term securities such as mortgage-related bonds more attractive to investors.
Later today, the minutes from the last FOMC meeting will be released. Market participants will be looking at how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form opinions about when the Fed may make a move to key short-term interest rates. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.
Tomorrow brings us the last relevant economic data of the week when April's Leading Economic Indicators (LEI) are posted at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a 0.2% increase from March's reading, meaning that economic activity is likely rise slightly during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher tomorrow.
If I were considering financing/refinancing a home, I woul d.... 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.