June 30th, 2008 8:58 AM by Lehel Szucs
Monday's bond market has opened that week flat as have the stock markets. The Dow is currently up 3 points while the Nasdaq is nearly unchanged from Friday's close. The bond market is also nearly unchanged, but due to strength in bonds late Friday we should see an improvement in today's mortgage rates of approximately .375 of a discount point.
This week brings us the release of very few economic reports for the markets to digest. There are only three monthly reports scheduled for release that are likely to affect mortgage rates, but one of them is arguably the most influential single piece of data that we see each month. This is a shortened trading week with the markets closed Friday and an early bond market close Thursday in observance of the Independence Day holiday.
The first of the week's three reports is of fairly high importance to the bond market. The Institute of Supply Management (ISM) will release their manufacturing index for June late tomorrow morning. This index measures manufacturer sentiment by surveying trade executives on current business conditions. A reading below 50 means that more surveyed executives felt business improved than those who felt it had worsened. Analysts are expecting to see a reading of approximately 48.6, meaning that sentiment fell from May's level. That would be considered good news for bonds and mortgage rates.
Overall, I am expecting to see the most movement in rates the latter part of the week. Tomorrow morning should bring some volatility with the ISM index, but Thursday's Employment report is definitely the most important of the week and can single handily lead to an improvement or increase in mortgage rates for the week.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 6 0 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.
©Mortgage Commentary 2008