July 7th, 2017 2:02 PM by T. Fanning
Last Updated: 7/7/17Friday's bond market has opened in negative territory following mixed employment data and early stock gains. The major stock indexes are showing moderate improvements, pushing the Dow up 54 points and the Nasdaq up 40 points. The bond market is currently down 5/32 (2.38%), which should cause this morning's mortgage rates to move slightly higher.Today's only economic data was June's Employment report at 8:30 AM ET. It gave us several important readings on the employment sector. Today's release showed that the unemployment rate inched up to 4.4% last month from May's 4.3%. The payroll number came in at up 222,000, exceeding forecasts of 173,000 by a pretty wide margin. It also revealed upward revisions to May and April's payroll numbers, adding 47,000 jobs to the year's total.The rise in the unemployment rate is technically good news for bonds, but the truth is that this reading isn't as important as it used to be. Where we did get favorable news for bonds was in the average earnings data. They rose 0.2% when analysts were expecting to see a 0.3% rise. Furthermore, May's earnings were revised lower to up only 0.1%. The earnings readings are relevant to bonds because rising wages fuels inflation in other parts of the economy. With subdued inflation being a concern of the Fed that could slow their monetary policy moves, the weaker readings are good news for bonds and mortgage rates.Overall, the report has things we should be happy about and also disappointed with. The initial reaction in the bond market was minimal. Unfortunately, the general negative tone of recent has since kicked in and we are now seeing selling in bonds that is causing this morning's increase in mortgage pricing.Also worth noting is the release of the Fed's semi-annual Monetary Policy report late this morning. This is the report that is used in the Fed's semi-annual two-day appearance before congress. That will take place Wednesday and Thursday next week, but the report will be posted shortly. There is a decent chance of it causing some volatility in the markets even though it will not be addressed publicly until next week.Next week has several important economic reports set for release in addition to a couple of Treasury auctions and two days of congressional testimony by Fed Chair Janet Yellen. The first part of the week is light but there is plenty taking place over the middle and latter days. Look for details on all of next week's mortgage-relevant events in Sunday evening's weekly preview.If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Lock if my closing were taking place between 8 and 20 days...Float if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.**http://www.hlmcolorado.com/DailyRateAdvisory
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.