Mortgage Rates Unchanged
Mortgage rates are still in a very narrow range as both the bond and mortgage markets were flat -unchanged on the day. Crude oil increased on news that Turkey shot down a Russian fighter jet when it violated Turkey’s air space. This morning’s Q3 GDP did not present any surprises. November consumer confidence index dropped, even with the revisions of the October readings.
The Fed held a meeting today to discuss the discount rate, 9 of the 12 Fed regional Presidents want the discount rate to be increased and most want an increase in the FF rate. A lot of news today but it’s a holiday week that will take a real shock to push rates or equities off this flat recent trading.
The discount rate is different from the FF rate. The discount rate is the overnight rate charged by the Fed to banks that come to the “window” to borrow - also referred to as the repo rate because the borrowing is re-paid the next day. Banks using the discount window are usually in need of overnight funds to square books. In the past when a bank went to the window to borrow the next thing that would happen is bank examiners descended on the bank because it indicated a problem might exist. No bank wants to use the window except as a last resort. The FF rate is the rate banks lend each other money.
Tomorrow has a lot of primary economic data. Weekly jobless claims, October personal income and spending and October durable goods orders. A little later, September FHFA home price index and October new home sales and the U. of Michigan consumer sentiment index. At Noon, the Treasury will auction $29B of 7yr notes.
Once markets get through the economic reports tomorrow morning, by noon many will leave the building for the holiday. The markets are open on Friday but a short session. Tomorrow’s key reports - durable goods orders and personal income and spending. New home sales will get a look but not likely to have a direct market impact. Technicals still neutral but slightly leaning to improvement - not likely on economic news but on increased tensions in the Mid-East, if at all.
In summary, bonds have managed to hold onto most of the recent gains. Float or Lock – there is really not much to say. If you are within 15 days of closing and funding, I think pulling the trigger today may the wise move. With the holiday approaching, I think many lenders may pull back on pricing regardless of what is happening in the markets.
The Fed held a meeting today to discuss the discount rate, 9 of the 12 Fed regional Presidents want the discount rate to be increased and most want an increase in the FF rate. A lot of news today but it’s a holiday week that will take a real shock to push rates or equities off this flat recent trading.
The discount rate is different from the FF rate. The discount rate is the overnight rate charged by the Fed to banks that come to the “window” to borrow - also referred to as the repo rate because the borrowing is re-paid the next day. Banks using the discount window are usually in need of overnight funds to square books. In the past when a bank went to the window to borrow the next thing that would happen is bank examiners descended on the bank because it indicated a problem might exist. No bank wants to use the window except as a last resort. The FF rate is the rate banks lend each other money.
Tomorrow has a lot of primary economic data. Weekly jobless claims, October personal income and spending and October durable goods orders. A little later, September FHFA home price index and October new home sales and the U. of Michigan consumer sentiment index. At Noon, the Treasury will auction $29B of 7yr notes.
Once markets get through the economic reports tomorrow morning, by noon many will leave the building for the holiday. The markets are open on Friday but a short session. Tomorrow’s key reports - durable goods orders and personal income and spending. New home sales will get a look but not likely to have a direct market impact. Technicals still neutral but slightly leaning to improvement - not likely on economic news but on increased tensions in the Mid-East, if at all.
In summary, bonds have managed to hold onto most of the recent gains. Float or Lock – there is really not much to say. If you are within 15 days of closing and funding, I think pulling the trigger today may the wise move. With the holiday approaching, I think many lenders may pull back on pricing regardless of what is happening in the markets.
Comments
Post a Comment