September 9th, 2009 1:28 PM by Lehel Szucs
Wednesday's bond market has opened in negative territory following early stock gains. The stock markets are extending yesterday's gains with the Dow up 60 points and the Nasdaq up 24 points. The bond market is currently down 8/32, but we will likely see little change in this morning's mortgage rates.
There is no relevant economic news scheduled for release today. The first release of the week comes tomorrow afternoon. The Federal Reserve will release its Beige Book report at 2:00 PM ET tomorrow. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings and is usually released approximately two weeks prior to each meeting. If it reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed's next move. Most likely though, it will be a non-event and will not lead to a noticeable change in mortgage rates.
Also tomorrow is the 10-year Treasury Note auction, which will be followed by the 30-year Bond auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET each day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading tomorrow and Thursday.
I am expecting the stock markets to influence bond trading and mortgage rates tomorrow morning. We may see weakness in bonds prior to the Treasury auction that may also put some pressure on mortgage rates. But we will likely see little change in rates until tomorrow afternoon.
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.
©Mortgage Commentary 2009