Friday, April 17th
Friday’s bond market has opened well in positive territory following a batch of favorable headlines from the Middle East. Stocks are also rallying on the same news, pushing the Dow up 778 points and the Nasdaq up 278 points. The bond market is currently up 20/32 (4.24%), which should allow for an improvement in this morning’s mortgage rates of approximately .250 - .375 of a discount point.
20/32
Bonds
30 yr - 4.24%
778
Dow
49,357
278
NASDAQ
24,381
Trailing 90 Days - National Average
Medium
Positive
There was no relevant economic data posted this morning. The early gains in both stocks and bonds are almost exclusively due to a couple of pieces of news regarding the Iran and the Middle East. First, there seems to be confirmation of peace talks resuming with Iran, possibly this weekend. That shows there may be progress towards ending the war. On that note, some of the details of the negotiations are starting to come to light. One that drew plenty of attention was rumor that Iran was willing to give up its enriched uranium (needed for a nuclear weapon) if the U.S. was to unfreeze the approximately $100 billion in Iranian assets that are currently frozen across the globe. The fact that Iran is considering giving up the uranium for something that the U.S. may be willing to agree to gives hope that a peace deal may in fact be able to be reached.
High
Positive
Secondly, Iran announced that the Strait of Hormuz is fully open for shipping as long as the ceasefire remains in place. This is critical for oil prices to come down, easing gas costs and inflation concerns. We are already seeing oil prices fall this morning, but it will take a bit of time for those declines to reach the gas pumps. Anything that means lower costs for businesses and consumers is almost always favorable news for bonds and mortgage rates. Hence the rally in bonds this morning and improvement to mortgage pricing.
Medium
Unknown
We have a couple of Fed-member speeches happening today. One particular speech stands out as the best chance to affect rates is at 2:00 PM ET when Fed Governor Waller speaks at Auburn University with a topic listed as Economic Outlook. If we see a reaction to his words, it will come during midafternoon hours today.
High
Unknown
Next week is very light in terms of scheduled economic releases that may affect mortgage rates. There are only three monthly reports scheduled, but one is a key measure of consumer spending. We also have a Treasury auction that may come into play during afternoon hours one day. The week begins with nothing of importance set for Monday, so we are looking for weekend headlines from the Middle East to be the focus. Look for details on next week’s activities in Sunday evening’s weekly preview.
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... Float 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.