May 10th, 2019 12:37 PM by T. Fanning
Last Updated: 5/10/19Friday's bond market has opened in positive territory due partly to favorable inflation data and trade-related news. The major stock indexes are showing sizable losses with the Dow down 159 points and the Nasdaq down 47 points. The bond market is currently up 4/32 (2.44%), but weakness late yesterday will likely cause a slight increase in this morning's rates if comparing to Thursday's early pricing.Yesterday's 30-year Treasury Bond auction went better than Wednesday's 10-year sale did, although not overly strong. The bond market did weaken after results were posted yesterday, causing some lenders to revise their rates upward intraday. I don't believe we can put the cause of the afternoon weakness on the auction, but it certainly did not have a positive impact on bonds or mortgage pricing.April's Consumer Price Index (CPI) was posted early this morning. It revealed a 0.3% rise in the overall index and a 0.1% increase in the more important core data. Both readings were 0.1% below forecasts, meaning inflationary pressures at the consumer level of the economy were softer than thought. Because inflation makes long-term securities less appealing to investors, we can consider this release good news for bonds and mortgage rates.As he warned, President Trump raised tariffs from 10% to 25% on many goods coming from China, effective this morning. It is expected the China will retaliate with the same on goods coming from the U.S. The escalation is believed to be detrimental to both economies, making it s a bond-friendly event. However, the news influenced trading and mortgage rates earlier in the week when it broke that this may happen today. That is why we have not seen much of a reaction this morning. Had the increases been averted, we likely would have seen a negative reaction in bonds and an upward move in mortgage rates.Next week brings us a handful of relevant economic reports that may affect mortgage rates, including an important consumer spending release. All of the week's events come mid-week and after, so it is a safe assumption that we will see the most movement in rates the latter part of the week. Look for details on all of next week's activities 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
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