Mortgage Rates Trends Update 9/11/2013
Wednesday’s
bond market has opened in positive territory due partly to President Obama’s
words last night that kept open the possibility of a military strike in Syria.
The stock markets are mixed during early trading with the Dow up 31 points and
the Nasdaq down 23 points. The bond market is currently up 8/32, which should
improve this morning’s mortgage
rates by approximately .125 of a discount point.
There is nothing scheduled for release this morning that is relevant to mortgage rates. Last night’s address to the nation didn’t reveal anything that was too much of a surprise, but just hearing that he believes there still may be a need to take military action was enough to boost bond prices this morning. With no economic data to derail that overnight momentum, we are seeing a positive open in the bond and mortgage markets. Although, the benchmark 10-year Treasury Note yield is still above 2.90% (2.93), which is in an area that leads me to believe that traders are still concerned about bond prices falling and yields rising in the very near future. Since mortgage rates tend to follow bond yields, rising yields mean higher mortgage rates. Therefore, please proceed cautiously if still floating an interest rate as there are a couple of events coming up that will be critical to determining mortgage rate movement.
We do have the first of this week’s two Treasury auctions scheduled for today that is likely to influence bond trading and mortgage pricing. That would be today’s 10-year Treasury Note sale that will be followed by tomorrow’s 30-year Bond auction. If investor demand for the securities was strong, we could see strength in the broader bond market after results are posted. On the other hand, a weak demand from investors could lead to falling bond prices and higher mortgage rates. Results will be released at 1:00 PM ET, so any reaction to the sale will come during afternoon trading.
In addition to the 30-year Bond auction, we do have a minor piece of economic data scheduled to be posted tomorrow. The Labor Department will give us their weekly unemployment update at 8:30 AM ET tomorrow. They are expected to announce that 327,000 new claims for unemployment benefits were filed last week, up from the previous week’s 323,000. Since this data tracks only a single week’s worth of initial claims, it usually had a minimal impact on the bond market and mortgage rates. The higher the number of new claims, the better the news it is for bonds and mortgage shoppers because rising claims are an indication of employment sector weakness. A wide variance from forecasts can influence bond trading enough to move mortgage rates slightly, but the data generally is not considered to be highly important.
Friday has a couple of highly important reports though. Early Friday morning we will get August’s Retails Sales data and Producer Price Index (PPI) that will give us key measurements of consumer spending and inflationary pressures at the producer level of the economy. September’s University of Michigan Index of Consumer Sentiment will be posted late Friday morning, but the two early reports will draw the most attention.
Hope everyone is having a great day as Fall is fast approaching us. If
you know of anyone needing help on financing when it comes to home mortgages,
tell them to give me a call at 314-744-7806 or by clicking on the link below:There is nothing scheduled for release this morning that is relevant to mortgage rates. Last night’s address to the nation didn’t reveal anything that was too much of a surprise, but just hearing that he believes there still may be a need to take military action was enough to boost bond prices this morning. With no economic data to derail that overnight momentum, we are seeing a positive open in the bond and mortgage markets. Although, the benchmark 10-year Treasury Note yield is still above 2.90% (2.93), which is in an area that leads me to believe that traders are still concerned about bond prices falling and yields rising in the very near future. Since mortgage rates tend to follow bond yields, rising yields mean higher mortgage rates. Therefore, please proceed cautiously if still floating an interest rate as there are a couple of events coming up that will be critical to determining mortgage rate movement.
We do have the first of this week’s two Treasury auctions scheduled for today that is likely to influence bond trading and mortgage pricing. That would be today’s 10-year Treasury Note sale that will be followed by tomorrow’s 30-year Bond auction. If investor demand for the securities was strong, we could see strength in the broader bond market after results are posted. On the other hand, a weak demand from investors could lead to falling bond prices and higher mortgage rates. Results will be released at 1:00 PM ET, so any reaction to the sale will come during afternoon trading.
In addition to the 30-year Bond auction, we do have a minor piece of economic data scheduled to be posted tomorrow. The Labor Department will give us their weekly unemployment update at 8:30 AM ET tomorrow. They are expected to announce that 327,000 new claims for unemployment benefits were filed last week, up from the previous week’s 323,000. Since this data tracks only a single week’s worth of initial claims, it usually had a minimal impact on the bond market and mortgage rates. The higher the number of new claims, the better the news it is for bonds and mortgage shoppers because rising claims are an indication of employment sector weakness. A wide variance from forecasts can influence bond trading enough to move mortgage rates slightly, but the data generally is not considered to be highly important.
Friday has a couple of highly important reports though. Early Friday morning we will get August’s Retails Sales data and Producer Price Index (PPI) that will give us key measurements of consumer spending and inflationary pressures at the producer level of the economy. September’s University of Michigan Index of Consumer Sentiment will be posted late Friday morning, but the two early reports will draw the most attention.
Call The Money Man
Comments
Post a Comment